China, Indonesia launch new local currency settlement framework

The central banks of China and Indonesia officially launched a local currency transaction (LCT) framework on Thursday, aiming to facilitate the further use of local currencies in bilateral trade and investment. The new framework is based on a memorandum of understanding signed in May this year, which upgraded a previous cooperation framework by expanding the scope of local currency settlements to cover all balance-of-payments items.

Also, on Thursday, the governors of the two central banks announced the start of a two-way trial of the China-Indonesia cross-border QR code interconnection project, which will allow transactions to be settled in local currencies.