“Indonesia started implementing cross-border payment system cooperation with Thailand in 2022 and Malaysia recently. Meanwhile, the collaboration with Singapore is targeted for release at the end of 2023,” she said here on Tuesday.
Apart from those three countries, Indonesia has also collaborated with the Philippines on financial innovation and payment systems since 2019.
Indonesia’s cooperation with a number of ASEAN countries has manifested in the equalization of Quick Response (QR) codes, fast payments for retail, and agreements on the use of local currencies or local currency settlements (LCS).
LCS is one of the agreements made by members of ASEAN+3 to strengthen financial cooperation in the region.
ASEAN+3 countries include the 10 Southeast Asian countries along with China, Japan, and South Korea.
LCS aims to reduce dependence on the US dollar so as to strengthen the currency stability of each member country.
Currently, Indonesia has established LCS cooperation with five countries—Malaysia, Thailand, Japan, China, and South Korea.
On a separate occasion, BI Governor Perry Warjiyo said that he will continue to expand the scope of the LCS.
Warjiyo informed that efforts to promote the use of local currencies aim to streamline trade transaction costs and reduce exchange rate risk because the use of local currencies shortens the transaction process by eliminating the process of converting local currencies to US dollars and from US dollars to local currencies.
He said efforts to reduce the use of the United States (US) dollar or de-dollarization through the use of local currencies have reflected in the declining use of the US dollar at the global level.
He referred to data from the International Monetary Fund (IMF), which has shown that the use of the US dollar has fallen to a level of around 50 percent after previously reaching 70 percent.
Related news: BNI offers plethora of benefits to Local Currency Settlement users
Related news: LCS transaction value with Malaysia, Japan recorded positive: BI