Local Currency Transactions More Massive, BI Promotes Strengthening LCT Scheme

MAKASSAR - Bank Indonesia (BI) assesses that the implementation of the Local Currency Transaction (LCT) scheme is increasingly relevant in the midst of global economic dynamics that are full of uncertainty.

Meanwhile, strengthening transactions using local currencies is considered capable of reducing dependence on the United States dollar (USD) as well as increasing the efficiency of international trade.

Bank Indonesia's Director of Financial Market Outreach, Ruth A. Cussoy Intama, said that bilateral cooperation through the LCT scheme needs to continue to be expanded, especially after the latest economic policy implemented by the US government.

"This Local Currency Transaction, according to us, is one of the initiatives that need to continue to be developed, especially since the US President implemented Liberation Day. So it's time for us to strengthen bilateral cooperation through the LCT scheme," he said in a Journalist Training, Friday, May 22.

According to BI data as of April 2026, the average number of LCT perpetrators per month reached 5,265 perpetrators or increased sharply compared to 497 perpetrators in 2021 and 1,741 perpetrators in 2022.

In addition, the growth trend continued to grow to 2,602 actors in 2023, and 5,020 actors in 2024 and in 2025, the number of LCT actors reached an average of 9,720 actors per month.

Ruth assessed that strengthening LCT is an important step to expand the use of domestic currencies in inter-country trade and transactions using local currencies can be a more efficient alternative without always having to go through the US dollar as an intermediary currency.

According to Ruth, a number of countries have begun to accelerate bilateral cooperation in the use of local currencies in trade and investment transactions through Appointed Cross Currency Dealer (ACCD) banks and Indonesia is said to be one of the countries that are quite aggressive in encouraging the implementation of LCT and have begun to receive recognition from partner countries.

"Oh, it's time for us to do this bilaterally, maybe it's a little bit, maybe Indonesia hasn't been considered one, and so on, with certain considerations they must have certain considerations, like us, but finally they realized, let's hurry up," he said.

"Well, these are the things that feel so that we see this LCT, thank God Indonesia is one of the most persistent to fight for and now recognized by countries," he added.

In addition to the increase in the number of perpetrators, the value of LCT transactions also experienced a significant spike, namely until April 2026, the total transaction was recorded at 22.61 billion US dollars or grew 309 percent year-on-year compared to the same period last year which reached 7.33 billion US dollars.

The increase shows the increasing use of local currency in international economic and financial transactions.

Ruth said this step was also considered capable of reducing the impact of global turmoil, especially due to fluctuations in the US dollar, on the trade and financial systems between countries.

However, Ruth emphasized that Indonesia did not abandon the US dollar completely, because the dollar is still the main currency in global transactions.

"We can see this, this volume is rising sharply, this is encouraging the diversification of currencies that don't have to be all through the US dollar, it doesn't mean we avoid the US dollar, because we know that globally (transactions are still) US dollars," he said.

"But for countries that have a lot of transactions directly with domestic currencies, why should we use dollars first because if we change, it's called changing, there must be a middleman, it's definitely not efficient, maybe that's the essence of LCT," he said.

Currently, Indonesia's main partners in the implementation of LCT include China, Japan, and Malaysia, namely the largest contribution to transactions comes from China at 89 percent, followed by Japan at 6 percent and Malaysia at 3 percent.

In addition, BI also assesses that the LCT scheme can reduce the cost of bilateral trade transactions, expand currency diversification, deepen the regional financial market, and increase the participation of business actors in the region.

Ruth explained that the implementation of LCT Indonesia began in 2018 with Malaysia and Thailand, then expanded to Japan, China, and South Korea.

Meanwhile, he added that cooperation with Singapore and India is still in the finalization of operational guidelines, and in the near future, BI also plans to implement LCT with Saudi Arabia.