INDONESIA: Local Currency Settlement Framework Agreed with China

In a joint move, the Bank of Indonesia (BI) and the People’s Bank of China (PBOC) have introduced a local currency settlement (LCS) framework. This will allow the use of both the rupiah and yuan in bilateral transactions processed via approved currency dealers without the need for a US dollar intermediary stage. In addition, the framework facilitates the use of direct exchange rate quotations and the loosening of certain regulations related to foreign exchange transactions between the two currencies. The move follows a number of similar agreements put in place between Indonesia and several other Asian nations, notably Japan, Malaysia and Thailand. 

In order to implement the new arrangement, the BI and the PBOC have drawn up a designated list of Appointed Cross-Currency Dealers (ACCDs), a number of which are listed below: 

Indonesia  

Bank Central Asia, Bank of China (Hongkong), Bank China Construction Bank Indonesia, Bank Danamon Indonesia, Bank ICBC Indonesia, Bank Mandiri, Bank Maybank Indonesia, Bank Negara Indonesia, Bank OCBC NISP, Bank Permata, Bank Rakyat Indonesia and Bank UOB Indonesia. 

Mainland China  

Agriculture Bank of China, Bank of China, Bank of Ningbo, Bank Mandiri Shanghai Branch, China Construction Bank, Industrial and Commercial Bank of China, Maybank Shanghai Branch and United Overseas Bank (China) Limited. ​​​​​​​