Bank Indonesia and the Monetary Authority of Singapore agree to implement LCT starting in 2024
ASIATODAY.ID, JAKARTA – Bank Indonesia and the Monetary Authority of Singapore signed a Letter of Intent regarding the transaction settlement framework in local currency settlement, on Friday, 17 November 2023, in Singapore.
Bank Indonesia Governor Perry Warjiyo said that cooperation on wider use of local currency in bilateral transactions through the Local Currency Transaction (LCT) framework is expected to be implemented in 2024.
“Through the implementation of this LCT framework, the QR payment interconnection initiative between countries will later use direct quotations of local currency exchange rates provided by Appointed Cross Currency Dealer (ACCD) banks,” he said in an official statement, Friday, November 17 2023.
Once implemented in 2024, Perry said this framework will facilitate the settlement of cross-border payment transactions, including QR payments, trade and investment between Indonesia and Singapore using each country’s local currency. This will support business actors and other users to minimize exposure to exchange rate risk and increase efficiency.
For your information, the Letter of Intent is a follow-up to the signing of a Memorandum of Understanding signed by the two central banks regarding cooperation to encourage bilateral transactions in local currencies (LCT framework) in August 2024.
This is in line with efforts to strengthen ASEAN financial integration to facilitate the use of local currency in transactions between ASEAN countries.
At the same time, Bank Indonesia and the Monetary Authority of Singapore also inaugurated the implementation of cross-border QR payment interconnection between Indonesia and Singapore. This implementation allows users or customers to make retail payments between countries using their payment application, by scanning the Quick Response Code Indonesian Standard (QRIS) or QR Network for Electronic Transfers Singapore (NETS) displayed by merchants in Indonesia or Singapore.
Managing Director of the Monetary Authority of Singapore Ravi Menon said that the QRIS-QR NETS payment interconnection will encourage e-commerce activities between countries and tourist spending between Singapore and Indonesia by individuals and small businesses.
Ke depan, kata dia, kerangka kerja sama penyelesaian mata uang lokal oleh Bank Indonesia dan Monetary Authority of Singapore pun akan melengkapi interkoneksi pembayaran QR melalui fasilitasi penggunaan rupiah Indonesia dan Dolar Singapura untuk penyelesaian transaksi pembayaran antarnegara.
“Inisiatif ini menandakan pencapaian Singapura dalam memperkuat interkoneksi pembayaran lintas negara yang terus berkembang dengan negara mitra utama di regional,” kata Ravi. (AT Network)
Check out other news and articles at Google News