Hong Kong, Indonesia move towards direct transactions in yuan, rupiah
Agreement between People’s Bank of China, HKMA and Bank Indonesia aims to enhance efficiency and encourage use of the currencies
The People’s Bank of China, Hong Kong Monetary Authority (HKMA) and Bank Indonesia signed an agreement on Thursday to create a framework for bilateral transactions between Indonesia and Hong Kong.
The parties aimed to implement a currency transaction framework for the direct exchange and settlement of Indonesian rupiah and Chinese yuan in cross-border trade and investment activities among companies and institutions in Indonesia and Hong Kong, according to an HKMA statement.
This initiative was designed to enhance the efficiency of cross-border transactions, while encouraging greater use of regional currencies, it 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,” said Eddie Yue, chief executive of the HKMA.
The initiative follows up on a measure outlined in last year’s policy address and this year’s budget. Officials pledged to facilitate more convenient foreign exchange quoting, conversion and trading between the yuan and regional currencies in Hong Kong, boost the development of the offshore yuan market and further cement Hong Kong’s status as the world’s largest offshore yuan business hub, the HKMA said.