Jakarta (Indonesia Window) – Indonesia’s central bank, Bank Indonesia (BI), has recorded a 10-fold increase in value, reaching 109.4 million U.S. dollars, in bilateral transactions using Local Currency Settlement (LCS) between business actors in Indonesia and Japan.

In early 2020, the value of LCS transactions per month only reached 9.8 million dollars, then increased by 10 times in 2021 (until September) to 109.4 million dollars monthly.

"Indonesia’s trade and investment relations with Japan continue to improve. We can optimize this through the Indonesia-Japan LCS," BI’s senior deputy governor Destry Damayanti said in an official statement here on Thursday (Nov. 11).

The acceleration of the LCS implementation between Indonesia and major trading partners is an effort to accelerate national economic recovery, especially in the export-import and investment sectors.

Destry added that Japan is listed as Indonesia's second largest trading partner in exports and third as an importing country.

"With the LCS cooperation between Japan and Indonesia, the volume and value of trade and investment between the two countries are expected to continue to increase," she said.

Currently, Indonesia's LCS cooperation has been established with four largest trading partner countries, namely Thailand, Malaysia, Japan, and China. These four countries were preferred because they recorded high value of trade transactions and direct investment.

The average export transaction value in 2015 to 2020 was 94 percent for exports and 83 percent for imports using U.S. dollars.

Destry said, in the future, dependence on one currency could be reduced through the implementation of LCS, in addition to diversification to manage risks.

Reporting by Indonesia Window