The central bank of South Korea and Indonesia signed a memorandum of understanding on boosting bilateral trade in national currencies and abandoning the dollar as an intermediary, reports say. Reuters.
The move is expected to help companies in South Korea and Indonesia reduce transaction costs and currency exposure The central banks of the two countries mentioned in a joint statement.
Bank Indonesia and Bank of Korea confirmed that they will further strengthen cooperation through information exchange and regular discussions as the two countries seek to strengthen financial ties.
The agreement was signed within the framework of the 26th ASEAN+3 Finance Ministers and Central Bank Governors Meeting, which kicked off on May 2 in Incheon, South Korea.
ASEAN+3 is made up of ten ASEAN member countries, joined by China, Japan and South Korea.
Large economic unions such as ASEAN and the BRICS grouping of Brazil, Russia, India, China and South Africa are gaining momentum in their attempts to move away from the dollar in international trade.
The move comes amid sweeping sanctions imposed by Western countries on Russia, one of the world’s largest energy producers and exporters.
Indonesia’s central bank chief Peri Warjiu said last month that his country was moving away from the dollar, along with countries such as Thailand, Malaysia, China and Japan.
In March, Brazil and China signed an agreement to trade their currencies, leaving the US currency as the middleman. Russia began its de-dollarization program in 2014.
