ASEAN Countries Agree to Reduce Dependence on Foreign Currency

VIVA – The ASEAN Finance Ministers and Central Bank Governors Meeting (2023 AFMGM) agreed to reduce dependence on foreign currency such as the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements by using local currency (Local Currency Settlement/LCS). This aims to improve economic recovery and deal with global conditions. 

“Local currency is also to promote exports and investment. So, it will strengthen the balance and foreign exchange reserves of ASEAN countries,” Governor of Bank Indonesia Perry Warjiyo stated during a press conference in Nusa Dua Bali, on Friday.

ASEAN agreed to reaffirm resilience among others by using local currencies to support cross-border trade and investment in the ASEAN region. The current challenges also all rely heavily on international currencies and obviously, it can reduce risk stability in ASEAN, he explained. 

For achieving this, according to Warjiyo, it is necessary to develop capital account liberalization. This is so that local transaction currencies can create a strong focus and discuss cooperative transactions.

As for 2022, under the G20 Presidency, cross-border payment cooperation was also agreed upon with several ASEAN countries. Such as Indonesia, Malaysia, Singapore, the Philippines, and Thailand.

"And, this will be expanded regional connectivity payments will include other ASEAN members Vietnam, Brunei, Cambodia, and Laos have given their intention to join." he informed.