ASEAN Summit Agrees to Use Local Currency for Bilateral Transactions to Support Economic Stability

JAKARTADAILY.ID – As the region with the most stable economic growth in the world, ASEAN continues to strive to maintain economic stability. One of them is by using local currencies in transactions among member countries. The declaration of the use of local currencies was discussed at the 42nd ASEAN Summit in Labuan Bajo, East Nusa Tenggara, earlier this year.

On the sidelines of the 43rd ASEAN Summit in Jakarta, the declaration of the use of local currencies was then realized. Indonesian President Joko Widodo witnessed the signing of a Memorandum of Understanding on Cooperation and Coordination in order to Increase the Use of Local Currency in Indonesian Transactions with partner countries.

The signing ceremony was carried out by the National Local Currency Transaction (LCT) Task Force at Hotel Mulia, Jakarta, on Tuesday, September 5, 2023.

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Quoted from BPMI Setpres, the LCT cooperation framework is one of the agreements in the declaration of leaders at the 42nd ASEAN Summit in Labuan Bajo.

It aims to support economic stability by encouraging the use of local currencies in bilateral transactions between ASEAN countries. The establishment of the national task force involves 10 state institutions and ministries.

The signing of the memorandum of understanding was carried out by 10 parties from related ministries and institutions namely, Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto, Indonesian Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Indonesian Minister of Foreign Affairs Retno Marsudi, Indonesian Minister of Finance Sri Mulyani, Indonesian Minister of Industry Agus Gumiwang Kartasasmita, Indonesian Minister of Trade Zulkifli Hasan, Indonesian Minister of State-Owned Enterprises (BUMN) Erick Thohir, Governor of Bank Indonesia Perry Warjiyo, Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar, and Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadewa.

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The establishment of the LCT National Task Force is believed to be a coordination forum that further strengthens policy synergies between ministries/agencies in an effort to increase the use of local money in Indonesia's bilateral transactions with major partner countries.

The realization of LCT is expected to contribute positively to export-import activities, investment, and cross-border payment transactions, among others through cross-border QR, including in the future in facilitating securities trading transactions.

According to Bank Indonesia's statement, currently, there is an implementation of LCT cooperation between Indonesia and a number of countries in the region, namely Malaysia, Thailand, Japan, and the People's Republic of China. Meanwhile, with Singapore and South Korea, a joint agreement has been obtained to build the implementation of LCT cooperation with Indonesia. (***)