The Government, Bank Indonesia (BI), and the Financial Services Authority (OJK) have agreed on a smooth payment system through the expansion of local currency settlement (LCS) cooperation for international trade and investment with Malaysia and Thailand, it said in joint statement on Wednesday (Sep 4).

“This step is inline with the development of the payment system through the expansion of the Bank Indonesia National Clearing System and the launch of the Quick Response Indonesian Standard Code,” BI Governor Perry Warjiyo said in Jakarta yesteday.

The commitment is a series of achievements on the signing of two Memorandum of Understandings between BI and Bank Negara Malaysia and BI with Bank of Thailand to encourage the completion of bilateral trade transactions using the local currencies of each country starting 2016.

Since then, there has been an increase in the use of currencies local to settle bilateral trade transactions, along with a decrease in foreign exchange rate margins. The total trade transactions through LCS continue to show improvement.