TEMPO.CO, Jakarta-The Indonesian government and the People's Bank of China agreed to extend the validity period of their bilateral currency swap agreement, which ends in October. Coordinating Minister for Economic Affairs Darmin Nasution said the extension includes an increase in value.
"From 100 billion yuans to 130 billion yuans (approximately US$265.7 billion)," Nasution said in the 2nd Meeting of the High Level Economic Dialogue between Indonesia and China in Jakarta, Monday, May 9.
With the agreement, trade between Indonesia and China will be denominated in the yuan and the rupiah, without having to exchange currencies to US dollars. This way, the stability and values of the two countries' currencies is more controlled.
Darmin said the Chinese government will provide loans that Indonesia can use to finance infrastructure projects, including the constructions of 2,000 kilometers of road and 1,000 kilometers of toll road.
The government also plans to build 15 airports and 24 seaports until 2019; complete 35,000 MW of electricity projects; build 33 reservoirs; and develop an irrigation system covering an area of 1 million hectares.
In October 2013, Bank Indonesia and the People's Bank of China signed a currency swap agreement that valid for three years. That agreement was an extension to the first previous currency swap deal between the two countries signed in 2009.
In March 2014, Indonesia also agreed to a currency swap agreement with South Korea worth 10.7 trillion Korean wons or about Rp115 trillion (US$10 billion).
ANGELINA ANJAR SAWITRI
