Indonesia to promote local currency settlement in G20 meeting

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Indonesia will promote the use of local currency settlement (LCS) in cross-border trade and investment, as an effort to reduce dependency on the US dollar, the country’s Finance Minister Sri Mulyani Indrawati has said.

Indrawati said she will raise the issue about the LCS scheme during the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting scheduled for February 17-18, Xinhua news agency reported.

“If the LCS can be implemented at a wider global level, this could create a financial safety net among countries and could reduce the risks caused by the global economic and financial instability,” Indrawati told a seminar ahead of the FMCBG meeting.

“Under the LCS, transaction costs will be lower, because traders or investors do not need to convert each country’s currency into the (US) dollar,” she said.

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