ASEAN will switch to local currency in the region

JAKARTA: Southeast Asian countries have agreed to strengthen the use of local currencies in the region and reduce reliance on major international currencies to avoid the effects of the global crisis, Indonesia’s central bank said on Friday.

The agreement was reached on the final day of the Association of Southeast Asian Nations (ASEAN) finance ministers and central bank governors meeting, which was held on the Indonesian island of Bali, with Indonesia serving as the ASEAN chair this year.

Bank Indonesia Governor Perry Vargio said the organization will set up a task force to develop a process for the transition to local ASEAN currencies in financial transactions as an implementation of the current ASEAN cooperation framework on local currency settlements.

“Through the use of local currencies in transactions throughout the region, we will be able to strengthen our resilience in supporting regional cross-border trade and investment, which currently still depends on major international currencies,” Varjiyo said at a virtual press conference. after meeting.

Warjiyo said that if ASEAN countries could use their local currencies in the region, transactions and all payments could be made faster and could handle the global crisis. And if it succeeds, the value of their currencies will rise.

“At the moment, our numbers are small. But that is why we must promote this scheme. We must speed it up,” Varjiyo said.

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He also said that at the meeting, ASEAN countries agreed to expand cross-border payment opportunities to more countries in the region.