Jakarta. The central banks of Indonesia and Malaysia renewed their Local Currency Bilateral Swap Arrangement on Friday, enabling both nations to exchange their respective currencies, amounting to a total of Rp 82 trillion ($5.4 billion), over the next five years.

The agreement was signed by Bank Indonesia Governor Perry Warjiyo and Bank Negara Malaysia (BNM) Governor Abdul Rasheed Ghaffour during a meeting in Jakarta.

"For Bank Indonesia, strengthening cooperation in the local currency swap with BNM highlights the significance of international collaboration as part of our integrated monetary and payment system policies," Perry stated in an official release.

The renewed agreement aims to boost the use of rupiah and ringgit in cross-border transactions, trades, and investments between the citizens of both countries, he added.

The initial local currency swap agreement between Indonesia and Malaysia was first enacted in 2019 and subsequently renewed in 2022.

Indonesia is also working toward integrating its digital payment systems with neighboring countries to facilitate easier transactions without needing to convert currencies into the US dollar, as part of broader efforts to stimulate international arrivals and economic growth.

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