Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) have operationalised a new framework to settle bilateral trade transactions in local currencies. Announced on 31 August 2026, this Local Currency Transaction (LCT) Framework follows a Memorandum of Understanding signed in August 2022 and the agreement on operational guidelines in April 2026.
The LCT Framework is designed to support bilateral trade and enhance ASEAN financial integration by promoting the use of local currencies in intra-ASEAN transactions. Appointed Cross Currency Dealers (ACCDs) will facilitate the settlement of current account transactions, direct investments, and cross-border payments in Indonesian Rupiah and Singapore Dollar. This initiative is expected to provide businesses with greater flexibility and reduce exchange rate risks and costs.
Key features of the framework include direct quotations between the Indonesian Rupiah and Singapore Dollar and the implementation of rules to enhance local currency usage. The appointed ACCD banks in Indonesia include PT Bank Central Asia Tbk, PT Bank CIMB Niaga Tbk, and PT Bank DBS Indonesia, among others. In Singapore, the appointed banks are DBS Bank Ltd., Oversea-Chinese Banking Corporation Limited, and United Overseas Bank Limited.
The operationalisation of this framework marks a significant step towards strengthening economic ties between Indonesia and Singapore, potentially paving the way for similar initiatives within the ASEAN region.
