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Communication Department

9/8/2021 12:00 AM
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Businesses and Banks Welcome Indonesia-China LCS Implementation

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Businesses and banks in Indonesia and China have welcomed the joint initiative of Bank Indonesia and the People’s Bank of China (PBoC) to implement Local Currency Settlement (LCS) between both countries. LCS brings a range of benefits, including: (i) more efficient transaction conversion costs, (ii) alternative export financing/direct investment opportunities in the local currency, (iii) alternative hedging instruments in the local currency, and (iv) diversification of currency exposure in transaction settlement.  That was the key topic at today's (08/09) webinar, entitled “Local Currency Settlement: Benefits and Practices for Business” organised by the Bank Indonesia Representative Office in Beijing, which attracted 400 virtual participants from the business and banking worlds located in Indonesia and China.

In his speech, BI Deputy Governor, Dody Budi Waluyo, expressed hope that the LCS framework would be adopted widely and actively by businesses to support the national economic recovery, adding that the LCS framework demonstrates strong development progress and future potential in terms of transaction value, frequency and users.

The Indonesian Ambassador to China and Mongolia, Djauhari Oratmangun, took the opportunity to comment how the BI and PBoC initiative will increase trade and investment cooperation between Indonesia and China. “I am also optimistic that economic linkages between Indonesia and China will strengthen with the support of commitments in both countries to increase cooperation moving forward,” said Djauhari.

Panji Irawan, Managing Director of Treasury and International Banking at Bank Mandiri confirmed that Bank Mandiri has been approved as an Appointed Cross Currency Dealer (ACCD) and expressed appreciation to BI and PBoC, while giving his assurance that Bank Mandiri was prepared for full LCS implementation. LCS implementation has massive potential in line with the growing trend of transactions and direct investment between Indonesia and China.

Implementation of the LCS cooperation framework between Indonesia and China is expected to help reduce currency pressures on the rupiah and deepen non-USD foreign exchange markets in the region.  The LCS framework between Indonesia and China includes direct exchange rate quotations for transactions between rupiah and yuan, coupled with the relaxation of specific regulations to encourage use of the local currency.

Since 2018, Bank Indonesia has maintained LCS cooperation with Malaysia and Thailand to foster use of the local currency by businesses when settling bilateral trade transactions.  In August 2020, similar cooperation was implemented with Japan and on 6th September 2021, LCS cooperation with China became effective.  Bank Indonesia constantly coordinates with relevant government ministries and agencies to ensure the LCS framework is adopted widely by businesses in Indonesia and facilitated by banks approved as Appointed Cross Currency Dealers (ACCD).

Jakarta, 8th September 2021

Head of Communication Department

Erwin Haryono

Executive Director



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Tel. 021-131, Email:



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Working hours: Monday to Friday, 08.00-16.00 West Indonesia Time

Halaman ini terakhir diperbarui 9/13/2021 11:33 AM
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