Singapore and Indonesia operationalise framework for settlement of bilateral transactions in local currencies

28 October 2026

The Monetary Authority of Singapore (“MAS”) and Bank Indonesia (“BI”) announced the operationalisation of a framework for the settlement of bilateral transactions between Singapore and Indonesia in their respective local currencies (“LCT Framework”) on 31 August 2026.

The LCT Framework is intended to support bilateral trade and contribute to ASEAN financial integration efforts by promoting the wider use of local currencies in intra-ASEAN transactions. Under the LCT Framework, appointed cross currency dealers on each side will facilitate the settlement of current account transactions, transactions for direct investment, and cross-border payments in Indonesian Rupiah and Singapore Dollar.

The LCT Framework is expected to offer businesses and other users greater flexibility in conducting transactions in the local currency pair, while reducing their exchange rate risks and costs. Key features of the LCT Framework include the promotion of direct quotations between the Indonesian Rupiah and Singapore Dollar, and the implementation of relevant rules and regulations to enhance the usage of local currencies.

BI has appointed nine Indonesian banks, while MAS has appointed three Singaporean banks, to cooperate and undertake the operationalisation of the Rupiah-Singapore Dollar LCT Framework.

The announcement follows the signing of a memorandum of understanding in August 2022 and a subsequent agreement by both central banks on the Operational Guidelines for the framework in April 2026

Reference materials

The media release is available on the MAS website www.mas.gov.sg.