Indonesia-Singapore Officially Starts Bilateral Transactions in IDR & SGD

RRI.CO.ID, Jakarta – Bank Indonesia and the Monetary Authority of Singapore officially operationalized a Local Currency Transaction (LCT) framework on Monday, August 31, 2026, enabling cross-border settlements directly in Indonesian Rupiah (IDR) and Singapore Dollars (SGD). The initiative marks a significant step in strengthening financial connectivity and trade integration between two of Southeast Asia's major economies.

The launch follows a Memorandum of Understanding signed in August 2022 and operational guidelines agreed upon in April 2026. Implementation is further governed by Bank Indonesia's Board of Governors Regulation Number 25 of 2026, which sets the technical guidelines for bank-intermediated local currency settlements.

Under the LCT framework, designated banks can process current account transactions, direct investments, and cross-border payments without routing through a third-party currency. This arrangement aims to streamline financial flows and foster greater economic interdependence within the ASEAN region.

Businesses and market participants are expected to gain greater operational flexibility and reduced settlement costs under the new system. Furthermore, direct quotations between the rupiah and Singapore dollar will help mitigate foreign exchange risks during cross-border trade.

To execute these transactions, both central banks have appointed Appointed Cross Currency Dealer (ACCD) banks in their respective jurisdictions. In Indonesia, the authorized institutions include PT Bank Central Asia Tbk, PT Bank CIMB Niaga Tbk, PT Bank DBS Indonesia, PT Bank Mandiri (Persero) Tbk, PT Bank Maybank Indonesia Tbk, PT Bank Negara Indonesia Tbk, PT Bank OCBC NISP Tbk, PT Bank Pembangunan Daerah Jawa Timur Tbk, and PT Bank UOB Indonesia.

Meanwhile, the designated ACCD institutions operating in Singapore comprise DBS Bank Ltd., Oversea-Chinese Banking Corporation Limited, and United Overseas Bank Limited. These institutions will collaborate to facilitate seamless liquidity and currency exchange for eligible transactions.

The joint initiative underlines a broader effort by ASEAN central banks to promote local currency usage and enhance regional financial resilience. Executive Director of the Communications Department at Bank Indonesia, Ramdan Denny Prakoso, confirmed the operationalization of the framework through an official press statement, on Monday, August 31, 2026.