Indonesia Accelerates De-Dollarization as Local Currency Transactions\nSurge 163%<\/p>\n
Jakarta. Indonesia is accelerating efforts to reduce reliance on the\nUS dollar by expanding the use of local currencies in cross-border\ntransactions, with the value of such transactions surging 163%\nyear-on-year in early 2026.<\/p>\n
Under the local currency transaction (LCT) framework, total\ntransactions reached $8.45 billion in January\u2013February 2026, up sharply\nfrom $3.21 billion in the same period a year earlier, government data\nshow. The growth was supported by a rising number of users, which\nreached 14,621 in February 2026, with an average of 16,030 monthly\nusers\u2014well above the 2025 average of 9,720.<\/p>\n
Ferry Irawan, deputy for coordination of state-owned enterprise\nmanagement and development at the Coordinating Ministry for Economic\nAffairs, said the LCT framework has continued to expand since its launch\nin 2018.<\/p>\n
\u201cLCT utilization has broadened across key sectors, including\nmanufacturing, electricity and gas, transportation, trade, and services.\nThis demonstrates LCT\u2019s role as a concrete instrument to strengthen the\nrupiah and support real-sector activity,\u201d Ferry said in a statement on\nSunday.<\/p>\n
In 2025, LCT implementation was extended to six key partner countries\n\u2013 Malaysia, Thailand, Japan, China, South Korea, and the United Arab\nEmirates \u2013 with strengthened bilateral arrangements aimed at deepening\nregional financial cooperation and expanding local currency usage.<\/p>\n
Ferry noted that Indonesia\u2019s trade structure is well-positioned to\nsupport LCT optimization, as many of its major trading partners operate\noutside the dollar zone. The country recorded a consistent trade\nsurplus, reaching $1.27 billion in February 2026, driven by non-oil and\ngas exports such as coal, palm oil, and iron and steel.<\/p>\n
Bank Indonesia and the government are jointly advancing the LCT\nframework to diversify bilateral payment mechanisms, improve market\nefficiency, deepen financial markets, and ultimately reduce\nexchange-rate volatility while strengthening economic resilience.<\/p>\n
To further accelerate adoption, the government has established a\nNational LCT Task Force comprising 10 ministries and agencies. The task\nforce is tasked with enhancing coordination, supporting policy\ndevelopment, and promoting wider use of local currencies, particularly\nin export-import activities.<\/p>\n
\u201cThrough LCT, the government is committed to providing facilities,\nincentives, and simplified processes for businesses to improve\nefficiency, reduce transaction costs, and expand the use of local\ncurrencies in international trade,\u201d Ferry said.<\/p>\n
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