HONG KONG, June 11 (Xinhua) -- The People's Bank of China, Bank Indonesia (BI), and the Hong Kong Monetary Authority (HKMA) on Thursday signed a memorandum of understanding (MoU) to establish a cooperation framework aimed at promoting bilateral transactions in Indonesian rupiah (IDR) and offshore renminbi between Indonesia and Hong Kong, according to a press release published by the HKMA.

Under the MoU, a bilateral currency transaction framework will be implemented to facilitate the direct exchange and settlement of IDR and offshore renminbi in cross-border trade and investment activities amongst corporates and institutions in Indonesia and Hong Kong. This initiative is designed to enhance the efficiency of cross-border transactions, while promoting greater use of regional currencies.

BI and the HKMA will lead the preparatory work for the bilateral currency transaction framework, including the development of comprehensive operational guidelines. The two authorities will also identify and appoint selected banks in Indonesia and Hong Kong as appointed cross-currency dealers to participate in the framework.

Eddie Yue, chief executive of the HKMA, said that introducing the bilateral currency transaction framework for Hong Kong and Indonesia marked a major breakthrough in promoting regional currency and renminbi use, highlighting Hong Kong's value proposition as the offshore renminbi hub.