Korea, Indonesia central banks ink MOU for bilateral trade: report

It reduces companies’ exposure to exchange rate risks.

The Bank of Korea (BOK) and Bank Indonesia have inked a memorandum of understanding to promote bilateral transactions in local currencies, reports Yonhap News Agency, based on an announcement by the BOK.

The MOU reportedly lays out a framework for the Korean won-Indonesian rupiah transactions for direct investment and others by private banks, the BOK said.

The MOU is expected to help companies in South Korea and Indonesia reduce their transaction costs and exposure to exchange rate risks.

This is done by enabling the direct exchange rate quotation between the Korean won and the Indonesian rupiah in interbank trading.