RIYADH: The central banks of the UAE and Indonesia have inked a comprehensive deal which will intensify collaboration across key areas such as monetary and macro-prudential policy, financial stability, and payment systems.
The signed memorandum of understanding between the Central Bank of the UAE and Bank Indonesia signifies the extension of an already established cooperation framework between the two entities.
The deal aims to strengthen their relationship, elevate information exchange, and foster collaboration across various areas, according to a press statement.
The agreement was signed by Khaled Mohamed Balama, governor of CBUAE, and Perry Warjiyo, governor of Bank Indonesia.
Balama said: “The MoU with our Indonesian counterparts constitutes a strong basis for consolidating relations and strengthening the future partnership between both parties and contributes to opening the way for more joint regulatory cooperation to foster business opportunities in technology, innovation and digital.”
Under the deal, both central banks will also collaborate to enhance cooperation in digital financial innovation, Islamic finance, and technical capacity building.
He added: “We are confident that through this cooperation, a favorable environment for business growth, trade and investment partnership, will be established and leads to sustainable growth in the two friendly countries.”
Furthermore, the press statement added that CBUAE and Bank Indonesia will collaborate on the development of a regulatory framework addressing anti-money laundering and countering the financing of terrorism, showcasing their commitment to fostering a secure and compliant financial environment.
The trade and economic relationship between the UAE and Indonesia has witnessed a significant boost with the implementation of a free trade pact on Sept. 1, 2023.
The Indonesia-UAE Comprehensive Economic Partnership Agreement, signed in July of the previous year, marks Jakarta’s first such agreement with a Gulf country and Abu Dhabi’s inaugural pact with a Southeast Asian nation.
This agreement eliminates about 99 percent of existing tariffs and establishes mutual recognition of each country’s halal certification, further solidifying economic ties between the two nations.
“With the reduction of tariff or zero tariffs, Indonesia could strengthen exports. I believe once exports increase, it will attract more investment,” Husin Bagis, Indonesia’s ambassador to the UAE, told Arab News in September.
Furthermore, the value of bilateral trade between the UAE and Indonesia surged to around $5 billion in 2022, as per data from the Indonesian Trade Ministry. This represents an increase of around 20 percent compared to the previous year, when it amounted to $4 billion.