Dollar Steps Aside, Rupiah Goes Global as Transaction Currency in Hong Kong
Bank Rakyat China, Bank Indonesia (BI), and the Hong Kong Monetary Authority (HKMA) have signed a Memorandum of Understanding (MoU) to establish a bilateral currency transaction cooperation framework between Indonesia and Hong Kong.
According to a press release issued by the HKMA on Thursday (12/06/2026), the cooperation aims to facilitate the use of the Indonesian Rupiah (IDR) and offshore Renminbi (CNH) in cross-border trade and investment activities between businesses and financial institutions in both regions.
Through this bilateral currency transaction framework, companies and institutions in both Indonesia and Hong Kong will be able to perform exchanges and settle transactions directly using the Rupiah and offshore Renminbi without having to rely on a third currency.
The HKMA stated that the initiative is designed to increase the efficiency of cross-border transactions while encouraging wider regional currency usage in economic and investment activities.
As a follow-up, Bank Indonesia and the HKMA will lead the preparation of operational guidelines and the various technical preparations required for the implementation of this framework. Both authorities will also appoint several banks in Indonesia and Hong Kong as cross-currency dealers participating in the scheme.
HKMA Chief Executive Eddie Yue stated that the launch of the bilateral currency transaction framework between Hong Kong and Indonesia is a significant step in expanding the use of regional currencies, particularly the Renminbi.
“This bilateral currency transaction framework marks a major breakthrough in promoting the use of regional currencies and the Renminbi, while demonstrating Hong Kong’s role as an offshore Renminbi hub,” said Yue.
The cooperation is part of a broader effort to strengthen regional financial connectivity in Asia and reduce dependence on specific global currencies in cross-border trade and investment transactions.
Trade Advantages No Longer Dependent on the US Dollar
The agreement to use the Rupiah and Renminbi between Indonesia and Hong Kong essentially aims to cut dependence on the US Dollar in trade and investment transactions. Currently, many cross-border transactions must pass through the US Dollar before being converted into the target currency. This process adds conversion costs, lengthens transaction chains, and makes businesses more vulnerable to Dollar fluctuations.
Through this new scheme, companies in Indonesia and Hong Kong will eventually be able to conduct transactions more directly using the Rupiah and Renminbi. The Hong Kong Monetary Authority (HKMA) noted that the move is designed to enhance cross-border transaction efficiency and expand the use of regional currencies. Bank Indonesia has also long assessed that local currency transactions can increase efficiency, develop domestic financial markets, and support the stability of the Rupiah exchange rate.
Will this cooperation cause Indonesian tourists to shift from Singapore to Hong Kong? In the short term, the answer is not necessarily. The agreement signed at this time focuses more on trade and investment rather than retail or tourism transactions. However, in the long term, the wider use of the Rupiah in international financial centres such as Hong Kong could facilitate financial services, payments, and currency exchange for both businesses and the general public.