Heaptalk, Jakarta — Bank Indonesia (BI) has entered into a cooperation agreement with the Bank of Korea and the Ministry of Economy and Finance of Korea (MoEF) to promote using local currencies, the Rupiah and Won, for trade transactions between the two countries (08/30).
This local currency transaction (LCT) cooperation follows the signing of a Memorandum of Understanding (MoU) in May 2023 and the agreement on an operational framework in June 2024. The use of local currencies will take effect starting September 30, 2024.
The implementation of the LCT framework between Indonesia and South Korea marks a significant achievement in bilateral financial cooperation between the two countries. The LCT framework will strengthen the interconnection of Appointed Cross-Currency Dealer (ACCD) banks, facilitating cross-border transactions using local currencies.
Furthermore, this cooperation also encourages direct quotations between the IDR and KRW exchange rates and the relaxation of regulations needed to promote the use of LCT. Implementing the LCT framework is expected to increase bilateral trade transactions, reduce exchange rate risk exposure, and enhance transaction efficiency.
BI and the Bank of Korea have designated the following banks as ACCD banks in Indonesia and South Korea to facilitate operationalizing the Rupiah-Won LCT framework. The ACCD banks in South Korea include Woori Bank, KEB Hana Bank Seoul, Shinhan Bank Seoul, Industrial Bank of Korea, Kookmin Bank, SMBC Seoul, and the BNI Seoul Branch.
The ACCD banks in Indonesia include Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Central Asia, Bank CIMB Niaga, Bank BTPN, Bank Maybank Indonesia, Bank OCBC NISP, Bank DBS Indonesia, Bank Woori Saudara Indonesia 1906, Bank KEB Hana Indonesia, Bank Shinhan Indonesia, Bank IBK Indonesia, and Bank KB Bukopin.
