During a meeting in Jaipur, India and Indonesia advanced plans to deepen financial links by promoting local currency transactions and strengthening bilateral economic ties amid rising cross-border currency use.
India and Indonesia used a meeting in Jaipur on Tuesday to press ahead with plans to deepen financial co-operation, with Finance Minister Nirmala Sitharaman and Indonesia’s Vice Minister of Finance Juda Agung discussing trade, financial services and the use of local currencies in cross-border business. The talks took place on the sidelines of the BRICS Finance Ministers and Central Bank Governors meeting, according to India’s Ministry of Finance.
Sitharaman said Prime Minister Narendra Modi’s state visit to Indonesia last month had pushed the bilateral partnership into what the ministry called a “golden era”. Officials said the two sides reviewed ways to strengthen financial sector development, share experience on building and operating financial centres and advance the India-Indonesia economic and financial dialogue.
The discussions also built on work already under way to make trade easier by reducing reliance on the US dollar. In March 2024, the two countries signed a memorandum of understanding to promote settlement in the Indian rupee and Indonesian rupiah, a step meant to streamline payments and deepen financial links. Earlier reporting by Bloomberg and The Jakarta Post said the countries had also been exploring links between their fast payment systems and local currency settlement mechanisms.
That push comes against a broader backdrop of rising use of local currency transactions in Indonesia. Bank Indonesia has said the value of such transactions reached $6.3bn in 2023, up 53% from the previous year, as Jakarta expanded a national effort to encourage settlement in local currencies with partner countries. In Jaipur, both sides said they also saw the value of co-ordinating within multilateral institutions and sustaining growth through reform, infrastructure investment and digital public infrastructure.
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