In order to promote cross-border financial transfers, India and Indonesia intend to settle bilateral transactions s in local currencies and connect their quick payment systems, according to a top Indian government official.

India and Indonesia plan to trade local currencies

According to the official, who wanted to remain anonymous since the plans are private, the recommendations were reviewed by Indonesia’s Finance Minister Sri Mulyani Indrawati, and India’s Finance Minister Nirmala Sitharaman prior to meetings of the Group of Twenty countries in India. The official noted that the negotiations are far along and that once the necessary paperwork is in order, an announcement might be made.

The proposed accords with Indonesia come after India signed comparable deals with the United Arab Emirates over the weekend, which will enable the processing of local credit cards for retail purchases and increase the amount of trade conducted in rupees and dirhams.

A request for comment was not answered by the spokesperson for India’s Finance Ministry. A request for comment was similarly ignored by the Finance Ministry in Jakarta and Bank Indonesia.

The South Asian nation has so far connected its quick payments system with Singapore and is in discussions for similar quick cross-border transactions with a number of other nations, including Japan and France.

The actions are part of India’s effort to diversify its currency reserves and lessen its reliance on the US dollar. Since the Reserve Bank of India enabled more than a dozen banks to settle commerce in rupees with 18 countries last year, success has remained elusive, with trade volumes below $120 million.

However, given India’s rapidly expanding economy and appetite for food commodities, nations like Indonesia continue to have trade relations with India. Indrawati stated in an interview with Bloomberg that Indonesia wants to collaborate with India to mitigate the effects of China’s subpar performance.