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Bank of
Indonesia, the Hong
Kong Monetary Authority and People’s
Bank of China have signed a pact to promote bilateral
transactions in Indonesian rupiah and offshore Chinese renminbi
between Indonesia and Hong Kong, HKMA said in a statement late
last week.
Under the memorandum of understanding, a bilateral currency
transaction framework will be implemented to facilitate the
direct exchange and settlement of IDR and RMB in cross-border
trade and investment activities amongst corporates and
institutions in Indonesia and Hong Kong, Hong Kong’s central bank
and regulator said: “This initiative is designed to enhance the
efficiency of cross-border transactions, while promoting greater
use of regional currencies.”
The MoU underscores Hong Kong’s aim to promote itself as a major
cross-border financial jurisdiction in Asia, and globally.
Boston
Consulting Group recently reported that the Asian city has
matched Switzerland in cross-border size and is set to overtake
it. The move also highlights Indonesia’s own efforts to boost its
financial clout.
The Hong Kong and Indonesian authorities will also identify and
appoint selected banks in Indonesia and Hong Kong as Appointed
Cross Currency Dealers to participate in the framework.
“The signing of this MoU marks an important step in deepening
monetary and financial cooperation among the three authorities,”
Eddie Yue, CEO of the HKMA, said. “Introducing the bilateral
currency transaction framework for Hong Kong and Indonesia also
marks a major breakthrough in promoting regional currency and
renminbi use, and highlights Hong Kong’s value proposition as the
offshore renminbi hub.”