Government Reveals LCT Implementation Of Concrete Steps To Strengthen National Economic Resilience

Photo: Doc. Antara

JAKARTA - Deputy for Macroeconomic and Financial Coordination Ferry Irawan emphasized that the implementation of the Local Currency Transaction (LCT) has shown very positive results, both in terms of transaction value and number of users.

"This initiative has become one of the Government's priority programs in strengthening national economic resilience amid increasingly complex global challenges," he said in his statement, Thursday, September 12.

Previously, the Coordinating Ministry for Economic Affairs together with Bank Indonesia and eight Ministries/Institutions (K/L) who are members of the Local Currency Transaction (LCT) National Task Force signed a Cooperation Agreement (PKS) and a coordination meeting in the context of carrying out the duties and functions of the LCT National Task Force.

Ferry said that the use of local currencies in cross-border transactions not only helps maintain exchange rate stability, but also plays an important role in supporting the growth of the real sector.

Ferry explained that the signing of this PKS is expected to be a solid foundation in strengthening the implementation of LCT in the future, as well as increasing accurate data and information exchange between related Ministries / Agencies, as a basis for more targeted policy making.

Meanwhile, Indonesia has collaborated with LCT with eight countries, namely Malaysia, Thailand, Japan, China, Singapore, South Korea, India, and United Arab Emirates (UAE).

However, cooperation that is already at the implementation level has only been carried out with Malaysia, Thailand, Japan, and China. This means that Indonesian customers and customers from the 4 countries can make payments and receive them in local currency.

Until now, the Indonesian government is pushing for a cooperation framework with 4 other countries, namely Singapore, South Korea, India, and the UAE so that it can be implemented immediately so that LCT can have a wider impact.

Di sisi lain total transaksi LCT selama semester I-2024 telah mencapai 4,7 miliar dolar AS, yang menunjukkan peningkatan signifikan dari tahun-tahun sebelumnya.

Meanwhile, to date, total LCT users have reached 3,850, a significant increase of 1.5 times compared to the previous year, and 38 times from the first implementation of LCT in 2018.

According to Ferry, this achievement reflects the success of the program in expanding local currency adoption among partner countries.

In addition, Ferry also highlighted the importance of socialization to business actors, especially in the international trade sector.

"The socialization of LCT to business actors needs to be improved in order to strengthen understanding and encourage active participation in expanding local currency users," he said.

Ferry conveyed that innovation in providing incentives that are attractive to business actors, especially in the automotive sector, must be realized immediately to ensure real benefits for the business world.

Ferry emphasized that the Government is committed to continuing to strengthen cross-sectoral synergies in supporting the implementation of LCT in a sustainable manner with close collaboration and proper policies, it is hoped that LCT can become one of the main pillars in maintaining Indonesia's economic stability and strengthening the role of local currencies in international transactions.

In addition, Ferry conveyed that the Coordinating Ministry for the Economy is optimistic that this step will encourage increased national economic stability, strengthen the role of local currencies in cross-border transactions, and support growth in the real sector in a sustainable manner.

"Through effective implementation and appropriate incentives, we will see more and more business actors using LCT as a solution in international transactions, which in turn will strengthen Indonesia's position in the global economic arena," he concluded.