Bank Indonesia: Local-currency transactions rise by 309 per cent

Bank Indonesia (BI) has recorded that the use of the Local Currency Transaction (LCT) scheme reached US$22.61 billion as of April 2026. The value of these transactions rose 309 per cent year on year from US$7.33 billion in the same period last year.

According to Ruth Cussoy Intama, Director of the Financial Market Deepening Department at Bank Indonesia, the surge indicates that use of local currencies in cross-border transactions is expanding. ‘The volume rose sharply and this has helped push currency diversification,’ Ruth said at a journalist training event in Makassar, South Sulawesi, on Friday, 22 May 2026.

LCT is a settlement mechanism for bilateral transactions between Indonesian businesses and partner countries using each other’s currencies through a designated bank or Appointed Cross Currency Dealer (ACCD). Under this scheme, businesses can directly use domestic currencies in trade transactions without first converting to US dollars.

Nevertheless, she added, the US dollar remains the dominant currency in global trade. However, the use of local currencies is more efficient for transactions with countries that already have direct trade access with Indonesia.

Ruth said that the increase in local currency usage does not mean Indonesia is avoiding the US dollar. Increased currency transactions can make trade activity more efficient. This scheme also helps strengthen the resilience of the national financial system.

‘Using the dollar involves a middleman, which will trigger additional costs. So, the function of LCT is to increase the utility of the local currency and diversify risk,’ she said.