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The role of MOFA in supporting the greater use of local currency settlement framework

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This paper examines the role of the Ministry of Foreign Affairs (MoFA) in supporting greater use of the Local Currency Settlement Framework (LCSF), an international monetary cooperation initiated by Indonesia with Malaysia and Thailand in 2017 to reduce dependence on the U.S. Dollar (USD). Data from Bank Indonesia shows that 90% of Indonesia's international trade transactions still use USD, exposing Indonesia to U.S. policies and economic problems. Although LCSF aims to facilitate and boost trade and investment using local currencies, its implementation remains suboptimal due to mindset barriers among economic actors and limitations of Bank Indonesia's role in lobbying other central banks to expand cooperation, particularly as some central banks are not independent like BI. The paper evaluates the current development of the Indonesia-Malaysia-Thailand LCSF and its challenges, and analyzes how MoFA can further support greater LCSF usage, particularly abroad, through its role in conducting economic diplomacy with counterpart countries.

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Ketersediaan

2021-0244

Sesdilu 69-2021

Training Materials Repository

Tersedia

Informasi Detail

Judul Seri

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No. Panggil

Sesdilu 69-2021

Penerbit

Jakarta : Kementerian Luar Negeri., 2021

Deskripsi Fisik

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Bahasa

English

ISBN/ISSN

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Klasifikasi

NONE

Tipe Isi

text

Tipe Media

computer

Tipe Pembawa

online resource

Edisi

-

Subjek

Economic diplomacy — Indonesia
Monetary cooperation — ASEAN

Info Detail Spesifik

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Pernyataan Tanggungjawab

UPT. Sekolah Staf Dinas Luar Negeri

Versi lain/terkait

Lampiran Berkas

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