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ASEAN prioritises local currency transactions under Indonesia’s leadership

Under Indonesia’s ASEAN chairmanship, emphasis has been placed on expanding the region’s local currency transaction (LCT) network. Aimed at enhancing trade, streamlining cross-border payments, and promoting financial asset substitutability, the initiative has gained unanimous support from ASEAN leaders. Iss Savitri Hafid, Director of Bank Indonesia’s International Department, highlighted the significance of LCTs, noting they can bolster economic interactions within ASEAN. The ASEAN Finance Ministers and Central Bank Governors are establishing a task force dedicated to standardising LCT practices. Additionally, within the next three to four years, a Memorandum of Understanding is expected to be ratified by all ASEAN members to interlink their payment systems. This focus on LCTs aims to fortify regional economic ties and guard against external financial shocks.


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