Indonesia, South Korea on path of de-dollarization

Pars Today- Indonesia and South Korea have agreed to trade with national currency with each other.

According to Pars Today, Indonesia and South Korea have agreed on a cooperation framework for the implementation of the Local Currency Transaction (LCT) between the two countries, with the aim of promoting the use of the Indonesian rupiah and the South Korean won in bilateral trade.

Borna news agency reported in a report citing the Jakarta Globe newspaper that the agreement was finalized on Friday.

According to the report, the Central Bank of Indonesia (BI) is seeking to reduce dependence on the US dollar by establishing a strategic partnership with the Central Bank of South Korea (BOK).The LCT framework between Indonesia and South Korea is set to take effect on September 30.

"Erwin Haryono", head of the communications department of the Central Bank of Indonesia, said in a statement: "The implementation of the LCT framework between Indonesia and South Korea is a milestone in financial cooperation between the two countries.

Erwin said: "The implementation of the LCT framework is expected to increase bilateral trade transactions, reduce foreign exchange risk and improve transaction efficiency.BI and BOK have designated several banks as ACCD banks in Indonesia and South Korea to support the operation of the Rupiah-Won LCT framework.

With this agreement, the Central Bank of Indonesia has now established LCT frameworks with several other countries, including India, Malaysia, Thailand, Japan, China and Singapore.

Indonesia, along with a number of countries around the world, has been taking steps to reduce its dependence on the dollar in trade transactions for some time.

In fact, the US pressure policies on countries that do not follow Washington's policies, along with the US use of economic sanctions, have led these countries to use national currencies in bilateral trade transactions.

Russian President Vladimir Putin had previously announced: "The United States is using the dollar as a weapon, causing the international financial reserve institution to lose credibility.

Key phrases: dollar weapon, Indonesia and South Korea, Central Bank of Indonesia, dollar reserves, Indonesian rupiah, South Korean won

MG/ME