Bank Indonesia (BI) and Bank of Korea (BoK) signed a renewal of a bilateral local currency swap arrangement (BCSA). The arrangement allows the central banks exchange of local currencies up to KRW10.7 trillion or Rp115 trillion (US$8.21 billion).
The deal was signed by the governor of BoK, Juyeol Lee, and the BI’ governor, Perry Warjiyo, recently. Similar to the previous agreement, the purpose of the BCSA is to promote bilateral trade and financial cooperation for economic development of the two countries.
In particular, the arrangement will ensure the settlement of trade in local currency between the two countries even in times of financial stress and thus support regional financial stability. The effective period of the facility will be three years, from March 6, 2020 to March 5, 2023, which could be extended by mutual consent of both sides.
