RAKYAT TODAY.ID _ JAKARTA – Deputy III of the Presidential Staff Office (KSP) Panutan Sulendrakusuma supports the steps of the Indonesian Minister of Finance Sri Mulyani to encourage G20 countries to implement the Local Currency Settlement (LCS) scheme or agreements to use local currencies in trade and investment transactions . According to the role model, LCS plays an important role in accelerating Indonesia’s economic recovery after the COVID-19 pandemic. “As a country holding the G20 Presidency, Indonesia needs to set an example and call for the expansion of the implementation of SCS policies to support economic recovery after the COVID-19 pandemic, especially for developing countries that are vulnerable to being shaken by the global economic crisis,” Panutan said. Even so, according to Panutan, there are still many business actors who have not used this LCS facility because they regard the United States Dollar as the main profitable currency. “It is the duty of the Government to continue to socialize LCS to business actors. So that the LCS program can be put to good use to control exchange rate volatility and support the country’s economy,” he continued. Previously, Minister of Finance Sri Mulyani conveyed the importance of LCS in supporting Indonesia’s economic recovery program in the High Level Discussion, “Strategic Policy Framework to Enhance The Usage of Local Currency Settlement in Trade and Investment in Asia”, Wednesday (16/2). He explained that the bilateral initiatives of several countries to implement currency diversification and using LCS were able to reduce dependence on the United States Dollar currency. On this occasion, Sri Mulyani also appreciated the steps taken by Bank Indonesia which had encouraged the implementation of LCS since 2018.
For information, Indonesia already has SCS agreements with several countries including China, Japan, Thailand and Malaysia. The expansion of the use of LCS is expected to support the stability of the Rupiah in the domestic foreign exchange market. In addition, LCS also provides benefits to business actors including, cheaper transaction conversion costs because there is no need to exchange currency into Dollars and the availability of alternative trade financing and direct investment in local currencies. Meanwhile, Bank Indonesia Governor Perry Warjiyo is optimistic that LCS transactions in 2022 will increase, after growing significantly in 2021. Bank Indonesia will also plan to expand LCS cooperation with several other countries. (Parulian/Roy)
