Indonesia’s Central Bank and China Forge Historic Financial Partnership in Shanghai

Something big just happened in Shanghai. The two strongest central bank governors in Asia sat at the same table, not just for diplomatic small talk, but to build the foundation of a financial system that will be felt directly by millions of businesses and ordinary people in both Indonesia and China.

On Thursday, June 11, 2026, Bank Indonesia Governor Perry Warjiyo met directly with People's Bank of China Governor Pan Gongsheng at a High-Level Meeting in Shanghai. The agenda was no small matter. In one session, the two top monetary officials announced a series of agreements that fundamentally change how Indonesia and China transact with each other.

The first and most fundamental is the commitment of both central banks to explore increasing the value of the Bilateral Currency Swap Arrangement (BCSA). This is a mechanism where the two central banks can lend each other's currencies when needed, a kind of joint safety net amid increasingly unpredictable global financial volatility. 

(Paulus Sidik Budhiadi Andreas)

But what makes this meeting truly historic are three concrete achievements announced on the same day.

*First*, the signing of a Memorandum of Understanding (MoU) on Local Currency Transaction (LCT) now expanded to include Hong Kong. The MoU was signed by three parties: Perry Warjiyo from Bank Indonesia, Pan Gongsheng from PBOC, and Eddie Yue, Chief Executive of the Hong Kong Monetary Authority (HKMA). With this agreement, transactions between Indonesia, Mainland China, and Hong Kong can be conducted using rupiah or renminbi, without always having to rely on the US dollar as an intermediary currency.

*Second*, the official launch of cross-border QR payments between Indonesia and China. Imagine a batik trader in Solo receiving payments directly from Chinese tourists using their digital wallet app, or an Indonesian businessman shopping from Chinese suppliers without the hassle of convoluted currency conversion. That is the real picture of what was launched in Shanghai that day. The system now involves 191 payment service providers in China and 24 in Indonesia, all connected in one inclusive and efficient framework.

*Third*, the appointment of Bank Mandiri as a direct participant in the Cross-border Interbank Payment System (CIPS), China's cross-border interbank payment system. With this status, Bank Mandiri can process clearing and settlement of transactions between Indonesia and China faster, cheaper, and more reliably without having to go through intermediary banks in third countries.

Perry Warjiyo emphasized that going forward, financial cooperation between the two countries will continue to focus on three things: strengthening local currency transactions, developing financial infrastructure, and expanding synergy between central banks. One additional agenda announced was the plan to establish an RMB Clearing Bank in Indonesia, an institution that will later provide renminbi liquidity to support trade, investment, and financial activities domestically.

Pan Gongsheng delivered a consistent message. He emphasized that as two major economies and strategic partners in the region, China and Indonesia share a joint responsibility to continue deepening bilateral economic and financial cooperation. According to him, this strengthened cooperation is expected to make a real contribution to regional prosperity and stability, while also strengthening the economic resilience of both countries in facing global pressure.

Behind this series of technical agreements, there is a big message implied: Indonesia is seriously reducing its dependence on the US dollar in trade and financial transactions with China, a country that has been Indonesia's largest trading partner for years. And this time, the step doesn't stop on paper.