Indonesia and South Korea launch currency cooperation for trade

Bank Indonesia (BI) and the Bank of Korea, along with South Korea’s Ministry of Economy and Finance, have finalised a Local Currency Transaction (LCT) cooperation framework to facilitate bilateral trade between Indonesia and South Korea. This agreement, effective from September 30, aims to enhance the use of the Indonesian rupiah and South Korean won in trade transactions. The framework follows a series of agreements, including a memorandum of understanding and an operational framework agreement signed in May 2023 and June 2024, respectively. The LCT framework will support direct currency exchanges between rupiah and won, reduce exchange rate risks, and streamline transactions. Both countries have appointed several banks as cross-currency dealers to implement this framework, aiming to boost bilateral trade and economic cooperation.