Beijing: The initiative, announced jointly by the governors of both central banks, aims to expand the use of local currencies in trade and investment between the two nations, reducing reliance on the U.S. dollar and promoting financial resilience.

As part of the framework, transactions will now be settled directly in Chinese yuan and Indonesian rupiah. In addition, the new trial project will link cross-border payments between the two countries using QR code technology, making transactions faster and more accessible.

Pan Gongsheng, governor of the People’s Bank of China said that, “The establishment of a local currency settlement framework and the linkage of cross-border payments using QR codes will open new opportunities for trade and investment.”

According to Xinhua News Agency, the initiative builds on a memorandum of understanding signed in May, which updated earlier agreements and expanded the scope of settlements to cover all balance of payments items.