Bank Indonesia Wants Bilateral Currency Swap Arrangement (BCSA) With Japan

Bank Indonesia (BI) hopes can make an agreement of currency swap with Japan worth 1 trillion yen, or approximately USD 10.6 billion. This cooperation as a follow-up of Japan's commitment in the Council of the Annual Board of Governor of the Asian Development Bank (ADB) to lay a bilateral currency swap Arrangement (BCSA) worth 6 trillion yen with the countries in Asia.

BI Deputy Governor, Hartadi A. Sarwono said that "We expect at least be able to get 1 trillion yen. We try to negotiate with them. For Indonesia that is already good enough". Hartadi hope that BCSA could reduce dependence on the U.S. Dollar.

Previously we had works the currency swap with China Tiongkok worth RMB 100 billion or about USD 15 billion. Besides Japan, the Bank Indonesia as central bank is also exploring cooperation with Australia.

Through the swaps of currency, business performers in both countries can directly exchange currency in accordance with the agreement without having to switch to the U.S. Dollar.

"BCSA is to facilitate bilateral trade. So if we import beef or cow from Australia, Japan, China, we do not have to pay with the U.S. Dollar. We can use Yen, Renmimbi, and Australian Dollar (AUD), without looking at the dollar market," Hartadi said. Reduction of dependence on the USD that will ultimately strengthen the Rupiah.

By the middle exchange rate of BI, the rupiah appreciation to return to the position of Rp. 10,265,- per USD, stronger compared to a day before Rp 10,375,- per USD.

Hartadi said the main reason is a seemingly early signs of economic recovery of the world, including in the U.S. "Therefore, we will see the development, many said that the recovery can be faster than we expected".