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JAKARTA – Bank Indonesia (BI) and 9 Ministries/Institutions (K/L) that are members of the National LCT Task Force are strengthening their commitment to increasing the use of local currencies in economic and financial transactions with partner countries.

The 9 ministries/agencies include the Coordinating Ministry for Economic Affairs, the Coordinating Ministry for Maritime Affairs and Investment, the Ministry of Finance, the Ministry of Foreign Affairs, the Ministry of Industry, the Ministry of Trade, the Ministry of State-Owned Enterprises (BUMN), the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS).

Senior Deputy Governor of Bank Indonesia, Destry Damayanti, said that this agreement is a concrete step to implement commitments, cooperation, and policy synergy in accelerating the implementation of LCT, as well as being a guideline for implementing cooperation and coordination between the LCT National Task Force and all parties in encouraging increased realization of LCT, with the support of work program synergy between members of the LCT National Task Force.

“Furthermore, this step is expected to support currency diversification efforts in bilateral transactions as a form of risk mitigation amid high global uncertainty, as well as efforts to deepen financial markets and stabilize exchange rates,” said Destry in an official statement, Friday (30/8/2024).

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The commitment is realized through the signing of the Cooperation Agreement (PKS) and Coordination in the Framework of Implementing the Duties and Functions of the National Local Currency Transaction Task Force to encourage the implementation of the use of local currency (Local Currency Transaction / LCT) in bilateral transactions which are one of the Government’s programs in strengthening the national economy.

This PKS is a follow-up to the Memorandum of Understanding (NK) that was previously agreed on September 5, 2023. The PKS signing ceremony was held after the Deputy Level Working Committee Meeting of the LCT National Task Force which was also held on Thursday (29/8/2024).

In line with that, Deputy for Macroeconomic and Financial Coordination, Coordinating Ministry for Economic Affairs, Ferry Irawan welcomed the LCT implementation initiative in cross-country economic and financial transactions. This has shown very positive results, reflected in transactions that have increased rapidly both in terms of transaction value and number of users.

“The implementation of LCT with Indonesia’s increasingly developing strategic partners will provide real benefits to the national economy. With the same spirit, other Ministries/Institutions also support the acceleration of the implementation of LCT through their respective strategic programs,” said Ferry.

BI views that efforts to expand the implementation of LCT are also being carried out continuously with partner countries. Currently, the implementation of LCT cooperation between Indonesia has been carried out with Malaysia, Thailand, Japan, and China.