China has announced the Jakarta branch of Bank of China (Hong Kong) as the renminbi clearing bank in Indonesia, extending the RMB clearing network to one of Asia’s largest emerging economies.
The move is expected to facilitate bilateral trade and investment while advancing the international use of the Chinese currency in Southeast Asia, experts said.
The People’s Bank of China announced the decision on Friday in accordance with a memorandum of understanding on establishing RMB clearing arrangements signed between the PBOC and Bank Indonesia.
The memorandum was signed during the second governors’ meeting of the joint working program between the two central banks on June 11, as part of a package of new cooperation outcomes.
According to a statement released by the Bank of China, the establishment of the RMB clearing bank in Indonesia will make it easier for market entities to use the Chinese yuan in bilateral trade and investment, while elevating China-Indonesia economic and financial cooperation to a new level.
Offshore RMB clearing banks designated by PBOC are allowed to provide RMB purchases and sales services to offshore RMB participating banks for the purpose of goods trade, service trade and direct investment.
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