Bank Indonesia buy Chinese Bonds

The People Bank of China and Bank Indonesia has signed Agency Agreement on Bond Investment in the Interbank Bond Market of China on June 21, 2012, which allowed Bank Indonesia to invest on China interbank bond.

Chinese interbank bond is the largest RMB denominated bond market in China (RMB21.36 trillion as per 2011) which currently can be accessed by domestic investors and non domestic investors which obtained licenses from The People’s Bank of China as the authority.

Bank Indonesia Public Relation Director Difi A. Johansyah said in a release, this agreement is also a symbol of a close partnership between The People’s Bank of China and Bank Indonesia which has been built so far. This agreement is also a follow up of bilateral swap partnership between The People’s Bank of China and Bank Indonesia.

Difi added that the access to the Chinese bond market has assisted the central bank in managing its foreign reserves to diversify its holdings. However, he did not specify how much the central bank will invest.