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RMB usage to boost Indonesia, China economies: Bank of China
Chinese commercial lender Bank of China has called on Indonesian businesspeople to intensify the usage of Chinese renminbi (RMB), which has been included in the global basket of reserve currencies since October of last year, to promote trade with Chinese counterparts and reduce foreign exchange losses.
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Chinese 100-yuan (RMB) bank notes being counted at a bank in Huaibei in eastern China's Anhui province. (AFP/File)
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hinese commercial lender Bank of China has called on Indonesian businesspeople to intensify the usage of Chinese renminbi (RMB), which will be included in the global basket of reserve currencies in October, to promote trade with Chinese counterparts and reduce foreign exchange losses.
Bank of China Jakarta branch country manager Zhang Min said China is the biggest trading partner and the third biggest foreign direct investment (FDI) for Indonesia, which currently stands as the biggest economy in Southeast Asia and plays an important role in the world.
"The extensive usage of RMB will certainly promote trade and economic development of both countries […] It will reduce the losses caused by the US dollar fluctuations," he said during the Bank of China RMB Forum Indonesia in Jakarta on Wednesday.
He further said the inclusion of RMB in Special Drawing Rights (SDR) basket showed International Monetary Fund's (IMF) affirmation over RMB’s role in the global economy.
Until June, the Chinese central bank People's Bank of China (PBOC) and 35 monetary authorities have signed currency swap agreements worth more than 3.3 trillion yuan. Over 30 monetary authorities have also brought RMB into their foreign reserve totaling 864.7 billion yuan in 2015.
“With the implementation of RMB within SDR basket, and Chinese strategy of the ‘one belt, one road’ initiative, we are sure the market demand for RMB will be effectively stimulated," Zhang Min added.
SDR is an international reserve asset created by the International Monetary Fund (IMF) in 1969 to supplement its members' reserves. RMB accounts for 10.92 percent in SDR basket, following the US dollar and the euro which stands at 41 percent and 30.93 percent respectively. (ags)
