Singapore and Indonesia have officially operationalized a bilateral framework allowing cross-border payments, direct investments, and trade transactions to be settled in their local currencies, the Monetary Authority of Singapore (MAS) and Bank Indonesia announced on Monday (Aug 31).

The Local Currency Transaction (LCT) framework is designed to reduce exchange-rate risks and transaction costs for businesses by facilitating direct trade between the Indonesian rupiah and the Singapore dollar, bypassing intermediate conversion currencies.

The initiative also supports broader efforts to expand local currency usage across intra-ASEAN trade.

Under the framework, designated Appointed Cross-Currency Dealers (ACCDs) in both nations will process local currency settlements.

• Singapore ACCDs: DBS, OCBC, and UOB.
• Indonesia ACCDs: Bank Mandiri, Bank Central Asia (BCA), and Bank Negara Indonesia (BNI), among others.

Key provisions include promoting direct exchange rate quotations between the two currencies and establishing regulatory guidelines to incentivize local currency adoption.

This rollout completes a process initiated by a August 2022 memorandum of understanding and subsequent operational guidelines finalized in April 2026.