Bank Indonesia reports 309% surge in non-dollar LCT transactions in April 2026

Bank Indonesia has recorded significant progress in deepening domestic financial markets and currency diversification through the Local Currency Transaction (LCT) scheme. By April 2026, cumulative bilateral transactions reached $22.61 billion, a 309% year-on-year increase from $7.33 billion in January-April 2025. This growth underscores a consistent decline in the domestic market’s structural reliance on the US dollar. The acceleration of the LCT instrument aligns with geopolitical dynamics and shifts in the global financial architecture. Ruth Cussoy Intama, Director of Bank Indonesia’s Financial Market Development Department (DPPK), explained that global monetary uncertainty compels each country to strengthen its internal resilience. ‘Especially since the Trump Liberation Day era, all countries have realised that our neighbours are the closest and can help us,’ Ruth said. Through this channel, Bank Indonesia is directing currency exposure diversification to minimise external shocks to the rupiah. The LCT mechanism has proven to deliver tangible transaction cost efficiencies for the real sector involved in foreign trade. In conventional models, trade using the US dollar as an intermediary incurs double conversion fees — from the source currency to USD, then to the destination currency. The LCT scheme cuts this chain into a single direct exchange step via ACCD banking. ‘For countries with high mutual transactions, why go through USD first? If it has to go through USD, there’s definitely a middleman, and it’s inefficient,’ Ruth stressed the importance of cutting the conversion path. By Q1 2026, Indonesia’s LCT partnership network included Malaysia, Thailand, Japan, China, South Korea, and Singapore. According to periodic data, bilateral cooperation with China accounted for the dominant growth in volume, contributing 89% of total transaction volume. The high adoption of the yuan (RMB) and rupiah (IDR) reflects close integration among macroeconomic actors with high trade intensity with Chinese corporations. As a next step, Bank Indonesia is committed to expanding cooperation to new high-value economic partner countries. The monetary authority is currently in the finalisation stage to fully implement the LCT operational scheme with India (INR), Singapore (SGD), and Saudi Arabia (SAR). The process is now in the MoU signing and technical system integration phase. Expansion into Saudi Arabia is projected to optimise commodity cost efficiency and financing for religious travel such as the Hajj pilgrimage. Technical provisions in Bank Indonesia’s Governor Board Regulation (PADG) also offer flexible regulatory accommodation. This includes certain exceptions to the threshold for foreign currency purchases without underlying documents. Large-scale commercial transactions exceeding regular thresholds can still proceed if they meet criteria under the Capital Account Framework Agreement (CAFA). The bank also provides a Special Non-Resident Account (SNRA) to monitor speculative activity. LCT scheme penetration at the macro level is now being integrated into the retail and tourism ecosystems through cross-border digital payments. A tangible manifestation for the public is the interconnection of cross-border QRIS systems. Domestic residents travelling to partner countries like Thailand or Malaysia can make instant retail payments via national banking apps, with currency conversion handled seamlessly in the background via LCT clearing mechanisms. Overall, the 309% surge in cumulative LCT transactions by April 2026 is a strong indicator of enhanced national economic resilience. Non-US dollar currency diversification policies have successfully created a reliable safeguard for rupiah stability amid global volatility. The structured deepening of the foreign exchange market through product integration, infrastructure, and authority synergy demonstrates that reducing dollar dependency can be effectively achieved.