Indonesia to Sign LCT Cooperation with South Korea in Early May 2023

Indonesia will sign a cooperation on the use of local currency in trade, investment, and payment system transactions or Local Currency Transaction (LCT) with South Korea. Governor of Bank Indonesia (BI) Perry Warjiyo revealed that the signing of this cooperation will take place in early May 2023.

The use of local currencies in investment activities, trade and financial transactions is done to increase the diversification of currency use. It was so that the Rupiah will not be too dependent on major currencies, such as the United States (US) dollar. Until now, BI has conducted LCT cooperation with four countries, including Thailand, Malaysia, Japan, and China.

Indonesia will carry LCT with Korea through ASEAN payment connectivity for transactions between countries, as Indonesia has done using crossborder QRIS or fast payment. QRIS crossborder is a QR code payment system that can be used across countries. Using this crossborder QRIS system, transactions no longer need to convert or exchange currency again when shopping in the country they visit, simply by scanning the QR code.

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Bank Indonesia Senior Deputy Governor Destry Damayanti also said that the trend of Indonesia’s LCT transactions with the four cooperation countries continued to record an increase. With Japan, for example, LCT transactions reached USD 957 million until February 2023. The amount increased significantly from the 2022 average of USD 350 million per month. 

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