Regulatory Alerts2020-08-27
Bank Indonesia Regulation Number 22/12/PBI/2020 on Settlement for Bilateral Transactions Using Local Currencies Through Bank
Bank Indonesia issued Regulation Number 22/12/PBI/2020 to strengthen the framework for Local Currency Settlement (LCS) in bilateral transactions with partner countries, aiming to reduce dependency on the US dollar and mitigate economic vulnerability. The regulation establishes the criteria, appointment, and operational guidelines for Authorized Correspondent Currency Dealer (ACCD) Banks, detailing permitted financial activities such as account management, fund transfers, and financing in local currencies. It further mandates specific requirements for underlying transactions, direct quotation, open position limits, and reporting obligations to ensure compliance and stability within the LCS system effective from August 28, 2020.
Share