Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) have operationalized a framework for settling bilateral transactions between Indonesia and Singapore using the local currencies of each country (31/08).

The implementation follows a Memorandum of Understanding signed in August 2022 and operational guidelines agreed by the two central banks in April 2026. The agreement is set out in Bank Indonesia Board of Governors Member Regulation No. 25 of 2026 on the Settlement of Bilateral Transactions between Indonesia and Singapore Using Rupiah and Singapore Dollar through Banks, which serves as the guideline for implementing Local Currency Transactions (LCT).

Local Currency Framework to Support Bilateral Trade

The LCT framework will support bilateral trade and strengthen ASEAN financial integration through wider use of local currencies in intra-ASEAN transactions.

Under the framework, banks appointed as Bank Appointed Cross Currency Dealers (ACCD) in Indonesia and Singapore can facilitate the settlement of current account transactions, direct investment transactions, and cross-border payments using local currencies.

The framework is expected to provide greater flexibility for businesses and other users in conducting transactions using local currencies.

Rupiah-Singapore Dollar Transactions Aim to Reduce Costs

The use of local currencies is also expected to reduce foreign-exchange risks and transaction costs.

One of the main features of the LCT framework is the use of direct quotations between the Indonesian rupiah and the Singapore dollar. The framework also includes relaxed provisions and related arrangements to encourage the use of local currencies.

Banks Appointed to Facilitate LCT Transactions

BI and MAS have appointed several ACCD banks in Indonesia and Singapore to work together to facilitate LCT transactions using the rupiah and Singapore dollar.

The ACCD banks in Indonesia are:

• PT Bank Central Asia Tbk
• PT Bank CIMB Niaga Tbk
• PT Bank DBS Indonesia
• PT Bank Mandiri (Persero) Tbk
• PT Bank Maybank Indonesia Tbk
• PT Bank Negara Indonesia Tbk
• PT Bank OCBC NISP Tbk
• PT Bank Pembangunan Daerah Jawa Timur Tbk
• PT Bank UOB Indonesia

The ACCD banks in Singapore are:

• DBS Bank Ltd.
• Oversea-Chinese Banking Corporation Limited
• United Overseas Bank Limited

PHOTO: FREEPIK

This article was created with AI assistance.

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