Indonesia’s Push for De-Dollarization
Bank Indonesia (BI) has established a National Task Force to promote the use of the local currency in transactions with partner countries. The task force was formed during the ASEAN Summit in Jakarta and includes various ministries and government agencies along with BI. The initiative aims to expand the implementation of local currency transactions (LCT) and reduce reliance on the US dollar.
Indonesia has already implemented LCT agreements with Malaysia, Thailand, Japan, and China, and has signed cooperation agreements with Singapore and South Korea to develop an LCT framework. The country’s de-dollarization efforts are in line with the BRICS economic bloc’s decision to encourage the use of national currencies in international trade and finance.
As a member of ASEAN, Indonesia is working with other Southeast Asian nations to promote the use of local currencies for economic and financial transactions.
Hot Take
Indonesia’s establishment of a National Task Force to expand the use of local currency transactions demonstrates its commitment to de-dollarization. By promoting the use of the Indonesian rupiah in international transactions, the country aims to reduce its dependence on the US dollar and strengthen its economic sovereignty. This move aligns with the BRICS economic bloc’s decision to encourage the use of national currencies, and shows Indonesia’s active participation in regional efforts to promote financial independence. As the use of local currencies becomes more widespread, it could lead to greater stability in the global financial system and reduce the dominance of the US dollar.
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