The regulation is the Governor Board Regulation on Local Currency Settlement (LCS), BI`s Executive Director of the Communication Department Agusman said here on Monday.
"Transaction using local currencies can encourage bilateral trade between Indonesia and Thailand, as well as Indonesia and Malaysia and also reduce dependence on certain currencies so as to support the stability of the exchange rate," Agusman explained.
Bilateral trade without using US dollar will be conducted through commercial banks designated as intermediaries called Bank Appointed Cross Currency Dealer (ACCD Bank).
BI and the authorities in Malaysia and Thailand will assign AACD Banks. The authorized AACD Banks will gain flexibility in performing certain financial transactions and activities in foreign exchange markets.
According to Agusman, those activities and financial transactions include the opening of Baht and Ringgit currency accounts, direct quotes for Baht and Ringgit currencies to Rupiah, and trade financing in Baht and Ringgit currencies.
"This financial provision will be effective from Jan 2, 2018," he stated.
Meanwhile, technical regulations concerning the settlement of bilateral transactions between Indonesia and Thailand are contained in the Governor Board Member Regulations on the Settlement of Bilateral Trade Transactions between Indonesia and Thailand Using Rupiah and Baht through Banks.