Indonesia shifting away from USD in trade, financial transactions

27 Apr '23

1 min read

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Indonesia is following the BRICS' lead in gradually shifting away from the US dollar in trade settlements and financial transactions, central bank governor Perry Warjiyo has said.
It has implemented the 'more concrete' local currency trade system and has already tried the currency diversification method with Thailand, Malaysia, China and Japan.

Indonesia is following the BRICS’ lead in gradually shifting away from the US dollar in trade settlements and financial transactions, Bank of Indonesia governor Perry Warjiyo recently said. The country has implemented the local currency trade (LCT) system, he told a press conference after this month’s board of governors meeting.

The BRICS nations—Brazil, Russia, India, China and South Africa—are working on creating a common currency to reduce their USD reliance and are also working on establishing a new currency.

Warjiyo said Indonesia has initiated diversification of the use of currency in the form of LCT.

Indonesia’s LCT system is ‘considerably more concrete’ than the BRICS de-dollarisation approach, given that the country has already implemented the currency diversification method with Thailand, Malaysia, China and Japan, he was quoted as saying by an Indonesian media outlet.

Jakarta plans to sign an agreement with Seoul regarding local currency transactions in early May, he said.

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