Memorandum of Understanding
Bank of Korea Governor Rhee Chang-young and Bank Indonesia Governor Perry Warjiyo signed a memorandum of understanding (MOU) to promote direct trade between the Korean won and the Indonesian rupiah.
The two central banks will create conditions for private banks to directly exchange the Korean won and rupiah for trade and direct investment without the need for a conversion to U.S. dollars first.
This will cut costs and lower exchange rate risks compared to the previous method of exchanging U.S. dollars, the Bank of Korea said.
“We expect bilateral trade and investment to increase as companies can make payments without using U.S. dollars,” Perry told reporters shortly after signing the MOU, adding, “There are currently about 6,000 Korean companies doing business in Indonesia, but that number may rise.”