BKF: Most Used LCT Transactions in the Tourism Sector

Armfalcon.com, JAKARTA — The Fiscal Policy Agency (BKF) of the Ministry of Finance said that transactions using local currency or Local Currency Transactions (LCT) in ASEAN trade were most widely used in the tourism sector.

“Currently, the biggest transactions are in the tourism sector,” said Head of the Center for Regional and Bilateral Policy BKF Nella Sri Hendriyetty in a webinar that was monitored virtually in Jakarta, Wednesday.

According to Nella, the use of local currency in the tourism sector is usually done through QRIS when foreign tourists from Thailand or Malaysia visit Indonesia.

Even so, continued Nella, not all banking systems use this facility. There is still a need for further intervention from the government to expand the scope of use of local currency in the banking system.

On the other hand, Nella said the government together with Bank Indonesia (BI) were also still studying the impact of using LCT if it was used massively in ASEAN trade transactions.

“We are also analyzing what fiscal policies can support the implementation of this Local Currency Transaction (LCT) so that it can boost trade volume in ASEAN,” explained Nella.

Indonesia, as Chair of ASEAN 2023, encourages cooperation in the use of local currency in bilateral trade transactions or Local Currency Transactions (LCT).

The use of the local currencies of ASEAN countries is expected to strengthen the currency stability of each member country and reduce dependence on the United States (US) dollar.

This step is an anticipatory strategy to maintain economic stability and ASEAN neutrality in the midst of global economic challenges and conflicts that continue to occur in the world.

It is hoped that the use of the local currencies of ASEAN countries will also create diversity in the composition of foreign exchange reserves. This will provide additional protection to ASEAN member countries against the risk of currency volatility and add to the region’s economic strength.

source : Between