MAS, Bank Indonesia extend $10b bilateral financial agreement

The deal allows the two banks to access foreign liquidity from each other.

Monetary Authority of Singapore (MAS) and Bank Indonesia (BI) has extended the US$10b bilateral financial arrangement for another year, an announcement revealed.

This follows the earlier agreement between Indonesian President Joko Widodo and Singapore Prime Minister Lee Hsien Loong at the Singapore-Indonesia Leaders’ Retreat on 8 October to extend the bilateral financial arrangement for another year.

The arrangement was established in November 2018 to enable the two central banks to access foreign currency liquidity from each other, if needed, to preserve monetary and financial stability.

It is comprised of two agreements: a local currency bilateral swap agreement that allows for the exchange of local currencies between the two central banks of up to $9.5b or Rp100t (about US$7b); and a bilateral repo agreement of $4.1b (US$3b) that allows for repurchase transactions between the two central banks to obtain US dollar cash using G3 Government Bonds as collateral.