ASIATODAY.ID, JAKARTA – The Indonesian government continues to strengthen its commitment to using local currency in cross-border economic and financial transactions as part of efforts to strengthen national economic resilience.
Currently, Indonesia has collaborated on Local Currency Transactions (LCT) with eight countries, namely Malaysia, Thailand, Japan, China, Singapore, South Korea, India and the United Arab Emirates (UAE). However, cooperation that is already at the implementation level has only been carried out with Malaysia, Thailand, Japan and China. This means that Indonesian customers and customers from these 4 countries can make and receive payments in local currency.
Until now, the Indonesian government is pushing for a cooperation framework with 4 other countries, namely Singapore, South Korea, India and the UAE, so that it can be implemented immediately so that LCT can have a wider impact.
Total LCT transactions during semester I-2024 have reached US$4.7 billion, which shows a significant increase from previous years.
Currently, the total number of LCT users has reached 3,850, a significant increase of 1.5 times compared to the previous year, and 38 times since the first implementation of LCT in 2018. This achievement reflects the program’s success in expanding the adoption of local currency among partner countries.
Deputy for Macroeconomic and Financial Coordination at the Coordinating Ministry for the Indonesian Economy, Ferry Irawan, highlighted the importance of outreach to business actors, especially in the international trade sector.
“Socialization of LCT to business actors needs to be increased in order to strengthen understanding and encourage active participation in expanding users of local currency. “Innovations in providing attractive incentives for business actors, especially in the automotive sector, must be realized immediately to ensure real benefits for the business world,” said Deputy Ferry, quoted on Saturday, September 14 2024.
The government is committed to continuing to strengthen cross-sector synergies in supporting the sustainable implementation of LCT. With close collaboration and the right policies, it is hoped that LCT can become one of the main pillars in maintaining Indonesia’s economic stability and strengthening the role of local currency in international transactions.
The Coordinating Ministry for the Economy is optimistic that this step will encourage increased national economic stability, strengthen the role of local currency in cross-border transactions, and support sustainable real sector growth.
“Through effective implementation and the right incentives, we will see more and more business actors using LCT as a solution in international transactions, which in turn will strengthen Indonesia’s position on the global economic stage,” concluded Deputy Ferry. (AT Network)
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