Korean bank, BNI agree to finance imports

Korean bank, BNI agree to finance imports

JAKARTA (JP): Korean Export and Import Bank (KEXIM) and state
Bank Negara Indonesia (BNI) joined forces on Wednesday to help
improve bilateral trade between the two countries.

Under a one-year banking and payment agreement, the Korean and
Indonesian banks will act as clearing agents in the payment of
imports from each country.

The secretary-general of the Ministry of Industry and Trade,
Muchatar, said that with the help of the two banks, Indonesians
and Koreans could use their own currencies in financing imports.

"This scheme will certainly improve our bilateral trade, which
has been sluggish due to the shortage of foreign exchange and the
rejection of letters of credit issued by local banks," he said
after the agreement was signed.

He said Indonesia's bilateral trade with South Korea plunged
by 29.19 percent in 1998 to US$4.09 billion from $5.7 billion in
1997. Bilateral trade in the first quarter of this year dropped
by 0.43 percent compared to the corresponding period last year.

South Korean Ambassador Jung Pyo Hong said he hoped the
agreement signed by the two banks would enable the two countries
to promote trade relations.

He said that although his country had adequate foreign
reserves, the agreement would benefit South Korea in reducing the
cost of its foreign exchanges.

The vice president of the Indonesian Chamber of Commerce and
Trade (Kadin), Soy M. Pardede, said the involvement of the two
banks in trade activities would aid local companies who wished to
import goods from Korean firms.

He said a number of local companies wanted to import goods
from Korea, but were unable to realize their plans due to a lack
of foreign currency.

"With the facilities provided by the two banks, Indonesian
companies will no longer need to pay their imports in U.S.
dollars. This is really good news for local firms," he said. (01)