This will help create a more stable environment and reduce economic risks caused by the fluctuation of currency exchange rates
Jakarta (ANTARA) - The Association of Southeast Asian Nations (ASEAN) has formed a task force to formulate the transition process for members’ local currency transactions (LCTs) within intra-ASEAN financial transactions, the Finance Ministry's Fiscal Policy Agency (BKF) stated.

"This will help create a more stable environment and reduce economic risks caused by the fluctuation of currency exchange rates," Head of the BKF’s Regional and Bilateral Policy Center Nella Sri Hendriyetty said in a webinar on Wednesday.

The use of local currencies by ASEAN countries will strengthen the respective country members' currency and reduce dependence on the US dollar.

Moreover, local currency use could also reduce the economic risks stemming from the volatility of the exchange rates of ASEAN currencies against the US dollar.

Indonesia, as chair of the 2023 ASEAN, is encouraging the use of local currencies in bilateral trade transactions or LCTs.

Hendriyetty said that the Indonesian government is currently establishing approaches with Malaysia and Thailand for such transactions, which, to this day, have been done bilaterally, and not yet regionally.

There is no coercion in their implementation, she stressed.

"Thus far, they are not against the implementation of this concept," she said.

"However, to establish a partnership, there must be a bilateral agreement first. They are still waiting, and there are some that are still in the negotiation process," she informed.

Moreover, Indonesia's ASEAN chairmanship is also encouraging the use of a Quick Response Code or QR that can be used by all member countries for trade transactions, including in the tourism sector.

Next, Indonesia is also gathering ASEAN countries' support to include the energy transition in the second version of the energy transition taxonomy that matches the situation and characteristics of Southeast Asia for global acknowledgment.

This is intended to realize cheaper financing distribution for the energy transition.

In addition to funding in the finance sector, Indonesia is also lending support at the ASEAN forum for the improvement of infrastructure financing.

Related news: Kadin explores new, renewable energy pact with Myanmar
Related news: NTT readies floating accommodation ahead of ASEAN Summit
Related news: Labuan Bajo tourist sites to remain open during ASEAN Summit: Official

Translator: Imamatul Silfia, Fadhli Ruhman
Editor: Azis Kurmala
Copyright © ANTARA 2023