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BI plans to renew swap arrangement with Japan
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The Bank Indonesia (BI) building on Jl. MH Thamrin in Central Jakarta. (JP/Wienda Parwitasari)
B
ank Indonesia (BI) is planning to renew a bilateral swap arrangement (BSA) with Japan’s Finance Ministry in a move that could further bolster the country’s second line of defense for the rupiah.
The initial agreement on the revision of the BSA with Japan was reached during a meeting of finance ministers and central bank governors of ASEAN Plus Three members, held in Manila on May 4.
The three non-ASEAN countries in ASEAN Plus Three are China, Japan and South Korea.
BI international department head Doddy Zulverdi said both Indonesia and Japan were having discussions on utilizing the Japanese yen in the BCS scheme.
“Essentially, the amendment will give added flexibility [to BI]. We can also withdraw [funds] in the form of yen,” he told a press briefing in Jakarta on Friday.
Under the prevailing BCS scheme, which was signed on Dec. 12, 2016, and would expire on Dec. 12, 2019, Indonesia could tap into US$22.76 billion in funds from Japan in the form of the US dollar to bolster its forex reserve.
Doddy said the agreement would come into effect for three years since the amended version was signed between authorities of the two countries, adding that the amount of funds in the amended agreements would remain unchanged.
He said the inclusion of the yen in the swap agreement between Indonesia and Japan was an effort from the two countries to broaden the use of local currencies as well as maintaining stability in the regions amid uncertainty over the global financial market. (bbn)
