MAS, Bank Indonesia working on US$10 billion bilateral financial arrangement

THE Monetary Authority of Singapore (MAS) and Bank Indonesia are working on a US$10 billion bilateral financial arrangement that supports monetary and financial stability.

The US$10 billion package comprises a bilateral local currency swap and US dollar repurchase agreements. The two central banks will finalise and announce the details soon, said a statement from the Ministry of Foreign Affairs on Thursday.

The package was among several new initiatives announced following the meeting between Singapore Prime Minister Lee Hsien Loong and Indonesian President Joko Widodo in Bali on Thursday for the Singapore-Indonesia Leaders' Retreat. This was Mr Lee's third retreat with Mr Joko. During the retreat, they reaffirmed the excellent state of relations between Singapore and Indonesia, and agreed to continue building on this strong foundation of trust and mutually-beneficial cooperation.

The two leaders welcomed the robust and expanding economic ties between their countries. Singapore has been Indonesia's largest foreign investor since 2014, with US$8.4 billion in realised investments in 2017. The leaders witnessed the signing of the agreement between Singapore and Indonesia on the promotion and protection of investments (Bilateral Investment Treaty), and agreed on the importance of expediting discussions to update the bilateral avoidance of double taxation agreement. Taken together, these agreements will boost investor confidence and potentially increase two-way trade and investment flows.

Mr Lee and Mr Joko also discussed new areas of bilateral economic cooperation, including in the digital economy. A memorandum of understanding (MOU) was signed between Enterprise Singapore and the Indonesian Ministry of Industry's Agency for Research and Development of Industry on the Cooperation for Development and Implementation of Industry 4.0, as well as an MOU on financial technology cooperation between MAS and Indonesia's Financial Services Authority to facilitate information-sharing and promote joint innovation projects.