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16 Feb 2022
Indonesia Calls for Forex Diversity amid Pandemic Stimulus Withdrawals
The Index Today
G20 host country Indonesia has called for forex diversification in the financial markets after officials on Wednesday hailed the inclusion of local currencies in an attempt to support economic stability amid retreating pandemic-related stimulus support.
Indonesia and other Asian countries have come together to enable the facilitation of local currency transactions in lieu of the dollar, referred to as local currency settlement (LCS) arrangements.
Sri Mulyani Indrawati, the Finance Minister of Indonesia, believes that LCS arrangements need to be widely adopted and put into practice in order to protect the economies of emerging countries when developed nations tighten their monetary policies.
On Thursday, the minister addressed a seminar saying, "This [LCS] has been brought into a global agenda because this can also create a financial safety net for financial transactions between countries and reduce the vulnerability risks due to global economic shocks that cause financial instability.”
As per the People’s Bank of China (PBOC), mutual currency exchanges among China, South Korea, Japan and members of the Association of Southeast Asian Nations (ASEAN) have hit $360 billion.
©Photo: Financial Times
