The new framework is based on a memorandum of understanding signed in May this year, which upgraded a previous cooperation framework by expanding the scope of local currency settlements to cover all balance-of-payments items.
Also on Thursday, the governors of the two central banks announced the start of a two-way trial of the China-Indonesia cross-border QR code interconnection project, which will allow transactions to be settled in local currencies. It is expected to be fully operational by 2025.
“The establishment of the local currency settlement framework for bilateral transactions and the interconnection of cross-border QR code payments are both important achievements of China-Indonesia financial cooperation,” said Pan Gongsheng, governor of the People’s Bank of China (PBOC).
He said that the two central banks should continue to deepen cooperation in areas such as payment system connection, local currency use and digital currencies.
The two banks will also establish a joint working mechanism to institutionalize bilateral cooperation further, and to promote deeper, more solid financial cooperation, according to the PBOC.