Jakarta, CNN Indonesia —
Bank Indonesia say RI and China will use the payment scheme local currency settlement (LCS) starting in the third quarter of 2021 or next July. This means that the settlement of bilateral transactions between Indonesia and China will use the local currencies of the two countries or no longer use the US dollar.
“Maybe July or the third quarter of 2021 will be launched and implemented (Indonesian and Chinese LCS),” said Head of the BI Financial Market Development Department Donny Hutabarat in a virtual discussion with the media, Friday (25/6).
Currently, BI is still preparing regulations regarding the implementation of the LCS between Indonesia and China. According to Donny, the development of LCS Indonesia and China will grow rapidly.
“Indications that we see when discussing with business actors and banks, interest will be high, this later China will develop LCS quickly,” said Donny.
As a reminder, BI and China’s central bank, the People’s Bank of China (PBC) have agreed on payment transactions through the LCS scheme in September 2020. The agreement was carried out by PBC Governor Yi Gang and BI Governor Perry Warjiyo through the signing of a memorandum of understanding
LCS Indonesia and China will reduce transaction payments using US dollars as the currency commonly used in international transactions.
Prior to China, Indonesia already had payment agreements using the LCS scheme with several countries, such as Thailand, Malaysia, and Japan.
“Indonesia is one of the countries that is quite active leadership local currency in the region,” concluded Donny.
(aud/age)
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