BEIJING - The People's Bank of China (PBOC) Governor Pan Gongsheng and Bank Indonesia Governor Perry Warjiyo on Sunday signed a memorandum of understanding (MoU) on establishing a cooperation framework to promote bilateral transaction settlement in local currencies, the Chinese central bank said.

READ MORE: Premier Li: China ready to join Indonesia to address risks, challenges

The new agreement expands upon a previous MoU signed between the two central banks on Sept 30, 2020, which was limited to current account transactions and direct investment.

According to the PBOC, the scope of bilateral local currency settlement cooperation will be expanded to include transactions made through capital and financial accounts.

ALSO READ: China fully prepared for external shocks, premier tells enterprises

The MoU was designed to advance the use of local currencies in bilateral trade and investment while fostering cooperation between the two countries' monetary and financial markets.