The bilateral cooperation is expected to boost the volume of trade between the two countries and the use of local currencies for transactions, Bank Indonesia Governor Perry Warjiyo stated here on Thursday.
"This cooperation between Indonesia and Australia in the use of their respective currencies will reduce the dependency on any certain currency," he stated.
Under the agreement, the two countries could reduce the use of US dollar currency for inter-territorial transactions, he stated.
Hence, the use of US dollars from the foreign exchange reserve for paying imports could be minimized and saved as a precautionary measure against external economic pressure, he added.
The agreement was signed at the Executive Forum of Asia Pacific and East Asia in Manila, the Philippines, on Aug 5.
"The effort is made as part of the initiative to deepen the financial market in the framework of supporting Indonesia's economic resilience," Warjiyo noted.
Australia is one of Indonesia's important partners.
According to the trade ministry, Indonesia's exports to Australia from January to May 2018 had reached US$1.6 billion, or was up 14.05 percent, as compared to the same period last year, he added.