TEMPO.CO, Jakarta - Trade Minister Budi Santoso revealed that Indonesia is structuring a bilateral trade agreement with the Philippines centered on a barter scheme as an alternative transaction since both nations grapple with fluctuating exchange rates.
Budi made this statement while addressing the weakening rupiah on international trade at the Ministry of Trade office in Jakarta on Wednesday.
"We have alternatives, such as using a barter mechanism. We will meet with Filipino entrepreneurs on June 12," Budi stated.
Budi explained that the upcoming talks are a follow-up to discussions with a prominent Filipino businessman on the sidelines of the ASEAN Joint Foreign and Economic Ministers (AMM-AEM) in Cebu, Philippines, a while back.
According to the minister, the businessman has been importing Indonesian products and proposed using a barter mechanism to facilitate trade.
Furthermore, Indonesia and the Philippines have both experienced a weakening exchange rate against the US dollar. This proposal emerged as a new alternative.
Since receiving the pitch, the Ministry of Trade has followed up on the proposal by seeking a suitable buyer. Budi confirmed that a partner for the transactional alliance has been secured, and the formal signing ceremony is scheduled for June 12.
While holding back on naming the specific commodities targeted for the swap, Budi promised that details of the collaboration will be unveiled during the contract signing.
Regarding the impact of the weakening exchange rate on the prices of food and imported raw materials, Budi assured that the government is keeping a close watch on distribution channels and supply to safeguard public and industrial supply lines.
Read: Rupiah Edges Past Rp18,000 per US Dollar
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