Penang, Malaysia – Along with the increasing trade transactions in the ASEAN region and the fact that the use of local currency in Indonesia-Malaysia international trade is still low, the Indonesian Consulate General in Penang and the BI Representative Office in Singapore held a socialisation activity on the implementation of the use of local currency or Local Currency Settlement (LCS) in Penang, Malaysia (11/9).
The event was attended by the Executive Analyst of Bank Indonesia’s Singapore Office, Bayu Dwi Atmanto, Executive Director of Penang Centre of Medical Tourism (PMED), Mrs. Mary Ann, and Head of Treasure Distribution & Institutional Sales of CIMB Niaga, Herman.
Acting Counsellor General of Indonesia Penang, Kiki Tjahjo Kusprabowo explained that in 2022 there will be around 178,132 foreign patients seeking medical services in Penang Hospital and 90% of them are Indonesian citizens. The Indonesian Penang Representative welcomed the Indonesia-Malaysia LCS cooperation framework which is believed to be very helpful for the two countries’ efforts to increase mutually beneficial economic cooperation through the use of local currencies.
Executive Analyst of Bank Indonesia Office in Singapore, Bayu Dwi Atmanto in his speech said that Bank Indonesia together with the LCS National Task Force continues to intensify socialisation to stakeholders who can take advantage of the LCS framework, especially with Malaysia. The hospital sector in Penang, among others, can be a potential user of the LCS for service trade transactions given the high number of Indonesian citizens (WNI) who use health services in various hospitals in Penang. For this reason, it requests support from all stakeholders in Malaysia for the application of LCS Rupiah and Ringgit in their business applications.
Executive Director of Penang Centre of Medical Tourism (PMED), Mrs. Mary Ann said that from January to July 2023, there were 53,841 patients from Indonesia who sought treatment in Penang. Mrs. Mary Ann welcomed the initiative to use Rupiah to facilitate payment for health services in Penang because sick patients certainly do not want to bother looking for a money changer when there is little need for Ringgit.
In the presentation session, the Assistant Director of BI’s Financial Market Development Department, Mrs Puput explained that the Malaysian LCS cooperation has started since early 2018 with the signing of an MoU between the Central Bank of Indonesia and the Central Banks of Malaysia and Thailand. Currently Malaysia and Japan are the main contributors to the increase in LCS transactions with Indonesia with a transaction value of USD200 million so that the total LCS utilisation until July 2023 has reached USD3.8 billion.
Approximately 70 participants attended from various major hospitals in Penang, health associations in Penang, and several business entities in Penang including FMM (Federation of Malaysian Manufacturer) organisations, Penang Malay Chamber of Commerce, Penang Indian Chamber of Commerce. During the Q&A session, participants were enthusiastic in asking several questions related to the scope of LCS cooperation, the operability of Indonesian Debit cards with PGN logo in Malaysia within the LCS cooperation, the operability of QRIS in Malaysia, the conditions for opening Rupiah accounts in Malaysia, and the possibility of Indonesian health insurance claims in Malaysia within the LCS framework.
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