Prabowo and Chinese Premier Witness Milestone Deal Enabling Local Currency Investment
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JAKARTA, Investortrust.id — Bank Indonesia and the People’s Bank of China have signed a renewed agreement to promote the use of local currencies in cross-border transactions, marking a significant step in deepening financial integration between the two countries.
The memorandum of understanding (MoU) was signed in Jakarta on Sunday, May 25, 2025, by Governor Bank Indonesia Perry Warjiyo and Governor of the People’s Bank of China Pan Gongsheng. The signing was witnessed by President Prabowo Subianto and Chinese Premier Li Qiang during the latter’s state visit to Indonesia.
According to Bank Indonesia’s Head of Communications Department, Ramdan Denny Prakoso, the agreement expands on a previous MoU signed on Sept 30, 2020, by widening the scope of local currency settlement (LCS) cooperation to include not only current account transactions, but also capital and financial account activities.
“This MoU complements broader efforts to enhance payment connectivity, paving the way for greater use of local currencies in bilateral transactions,” Ramdan said in a statement.
The latest agreement is expected to facilitate trade and investment between Indonesia and China by reducing reliance on the US dollar. It also aims to strengthen monetary cooperation in the financial and money markets between the two central banks.
Implementation details—including eligible transactions—will be outlined in upcoming technical guidelines.