BI, BOK and the Korean Ministry of Finance are Ready to Implement LCT

ASIATODAY.ID, JAKARTA – Bank Indonesia (BI), Bank of Korea (BOK), and the Korean Ministry of Finance on Friday, August 30 2024, agreed on a Local Currency Transaction (LCT) cooperation framework to encourage the use of the local currency Rupiah-Won for transactions trade between Indonesia and South Korea.

This step is a follow-up to the Memorandum of Understanding (MoU) signed in May 2023 and the operational framework agreement in June 2024. The Indonesia-South Korea LCT framework will be implemented effectively starting September 30 2024.

The implementation of the LCT framework between Indonesia and South Korea is an important achievement in bilateral financial cooperation between the two countries. The LCT framework will strengthen the interconnection of Appointed Cross Currency Dealer (ACCD) banks in facilitating current transactions between countries using local currencies. This collaboration also encourages direct exchange rate quotation (direct quotation) between IDR and KRW as well as relaxing the provisions needed to encourage the use of LCT.

In the future, implementation of the LCT framework will encourage increased bilateral trade transactions, reduce exchange rate risk exposure, and increase transaction efficiency.

BI and BOK designated the following banks as ACCD banks in Indonesia and South Korea which will facilitate the operationalization of the Rupiah-Won LCT framework.

ACCD Bank in Indonesia:

1. PT Bank Mandiri (Persero) Tbk
2. PT Bank Negara Indonesia (Persero) Tbk
3. PT Bank Rakyat Indonesia (Persero) Tbk
4. PT Bank Central Asia Tbk
5. PT Bank CIMB Niaga Tbk
6. PT Bank BTPN Tbk
7. PT Bank Maybank Indonesia Tbk
8. PT Bank OCBC NISP Tbk
9. PT Bank DBS Indonesia
10. PT Bank Woori Saudara Indonesia 1906 Tbk
11. PT Bank KEB Hana Indonesia
12. PT Bank Shinhan Indonesia
13. PT Bank IBK Indonesia Tbk
14. PT Bank KB Bukopin Tbk

ACCD Bank in South Korea:

1. Woori Bank
2. KEB Hana Bank Seoul
3. Shinhan Bank Seoul
4. Industrial Bank of Korea
5. Kookmin Bank
6. SMBC Seoul
7. BNI Seoul Branch. (AT Network)

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