- The Executive Director of the Communications Department at Bank Indonesia (“BI”), Ramdan Denny Prakoso (“Executive Director”), has affirmed that BI has officially extended cooperation regarding the Bilateral Swap Arrangement (“BSA”) with the Bank of Japan, which represents Japan’s Ministry of Finance. This BSA extension agreement will remain in force between 14 October 2024 and 13 October 2027.
- It should be noted that the BSA agreement that Indonesia and Japan have entered into is a bilateral instrument that addresses the exchange of the rupiah currency with US dollars or Japanese yen as a second line of defense in order to maintain external resilience within the financial sector. The Indonesia - Japan BSA itself initially entered into force on 17 February 2003 and has been extended several times, most recently on 14 October 2021.
- According to the Executive Director, the extension of the BSA allows Indonesia to engage in currency exchanges involving rupiah and US dollars or Japanese yen up to an amount equivalent to US$ 22.76 billion. Both Indonesia and Japan have affirmed that the extension of the BSA should further strengthen financial cooperation between the two countries by providing a safety net, which is ultimately expected to contribute to overall financial stability, both within the region and globally.
- Furthermore, the Executive Director has stated that the BSA extension represents an important role in terms of international cooperation and as a part of BI’s core policy of maintaining Indonesia’s external economic resilience. (ANT)
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