Jakarta, Beijing eye $40b currency deal

renminbiIndonesia will sign a currency swap deal with China in October for up to $40 billion, the Jakarta Post on September 20 quoted Trade Minister Gita Wirjawan as saying.

News of the proposed deal, which will be signed by the two central banks during a visit by Chinese leader Xi Jinping from October 2, comes following the rupiah’s battering by a general capital flight from emerging markets in recent months. It is now this year’s worst performing currency in Asia, having lost nearly 15 per cent against the US dollar.

Wirjawan was quoted as saying the bilateral swap agreement would be for up to $40 billion. He gave no other details, including what terms China might require.

China agreed a 100 billion yuan ($16.34 billion) bilateral swap deal in 2009 with South-East Asia’s biggest economy which expired last year, and Bank Indonesia renewed a swap deal with Tokyo late last month.

The newspaper said the two Asian giants would also sign business deals worth a total of $20 billion during Xi’s visit.

Foreign exchange swaps allow sums of a certain currency to be used to fund charges designated in another currency without acquiring foreign exchange risk. It permits companies that have funds in different currencies to manage them efficiently.



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Indonesia will sign a currency swap deal with China in October for up to $40 billion, the Jakarta Post on September 20 quoted Trade Minister Gita Wirjawan as saying. News of the proposed deal, which will be signed by the two central banks during a visit by Chinese leader Xi Jinping from October 2, comes following the rupiah’s battering by a general capital flight from emerging markets in recent months. It is now this year's worst performing currency in Asia, having lost nearly 15 per cent against the US dollar. Wirjawan was quoted as saying the bilateral swap agreement would...

renminbiIndonesia will sign a currency swap deal with China in October for up to $40 billion, the Jakarta Post on September 20 quoted Trade Minister Gita Wirjawan as saying.

News of the proposed deal, which will be signed by the two central banks during a visit by Chinese leader Xi Jinping from October 2, comes following the rupiah’s battering by a general capital flight from emerging markets in recent months. It is now this year’s worst performing currency in Asia, having lost nearly 15 per cent against the US dollar.

Wirjawan was quoted as saying the bilateral swap agreement would be for up to $40 billion. He gave no other details, including what terms China might require.

China agreed a 100 billion yuan ($16.34 billion) bilateral swap deal in 2009 with South-East Asia’s biggest economy which expired last year, and Bank Indonesia renewed a swap deal with Tokyo late last month.

The newspaper said the two Asian giants would also sign business deals worth a total of $20 billion during Xi’s visit.

Foreign exchange swaps allow sums of a certain currency to be used to fund charges designated in another currency without acquiring foreign exchange risk. It permits companies that have funds in different currencies to manage them efficiently.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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