Jakarta (Indonesia Window) – Indonesia’s central, Bank Indonesia (BI) and the Bank of Japan (BoJ) which acts as an agent of the Japanese Ministry of Finance, have signed an agreement to extend Bilateral Swap Arrangement (BSA), which is effective as of October 14, 2021.

As with the earlier agreement, this cooperation allows Indonesia to swap its rupiah currency with U.S. dollars and/or Japanese yen with the same swap facility value, which is up to 22.76 billion dollars or the equivalent value in Japanese yen.

"The extension of the Indonesia-Japan BSA cooperation also pays attention to its alignment with the amendments to the Chiang Mai Initiative Multilateralization (CMIM) agreement which is a reference in the BSA cooperation," said Director of the BI Communications Department, Muhamad Nur, in his official statement here, Thursday (Oct. 14).

CMIM is a regional financial cooperation initiative among ASEAN+3 countries in the form of liquidity support facilities for member countries as part of the financial safety net of these countries.

According to Nur, Indonesia and Japan assess that the extension of the BSA could further strengthen the financial cooperation of the two countries in providing a financial safety net that is expected to contribute to financial stability at the regional and global levels.

The BSA between Indonesia and Japan is a bilateral currency exchange agreement between BI and the BoJ as a second line of defense in maintaining external resilience.

The agreement was first signed on February 17, 2003, and was last extended on October 14, 2018, with a validity period of three years.

Reporting by Indonesia Window