Fact Check: As Rupiah Falls, Is Indonesia Shifting to the Yuan?
A TikTok video circulating online claims that Indonesia has begun to abandon the US Dollar following the weakening of the Rupiah. The video, uploaded on 2 June 2026, uses the narrative: “Indonesia No Longer Trusts the US Dollar! After the Rupiah Plummeted, Purbaya Has Withdrawn From the US Dollar and Chosen the Yuan.” Within three days, the content garnered over 330,000 views, along with thousands of likes and comments from netizens who believed the claim.
The video’s narrative links the weakening Rupiah to the government’s decision to issue Panda Bonds in Yuan. This information is used to conclude that Indonesia is abandoning the US Dollar in favour of the Yuan, claiming that Finance Minister Purbability has issued such a decision.
A fact-check by DW has found this claim to be misleading.
Verification process:
DW’s fact-checking team traced the source of the claims used in the viral video. The team found that Purbaya made statements regarding Panda Bonds during a press conference at the Istana Merdeka Complex, Jakarta, on 5 May 2026. During that session, Purbaya stated: “To strengthen the exchange rate, we will also issue Panda Bonds in China with lower interest rates, so that we are not too dependent on the dollar anymore.” However, the team found no statement suggesting that Indonesia would abandon the US Dollar or replace it with the Yuan as a benchmark currency.
Further investigation into the context of the statement reveals that the issuance of Panda Bonds is part of a financing diversification effort. This means the government is seeking to expand funding sources through various instruments and currencies to avoid over-reliance on a single source, such as the US Dollar.
What are Panda Bonds?
Panda Bonds are debt instruments issued in the Chinese financial market and sold to investors there in Yuan. This is not the first time Indonesia has issued foreign currency-denominated debt. Previously, the government has issued Global Bonds in US Dollars in 2023 and Samurai Bonds in Japanese Yen in mid-April 2026. These findings indicate that using currencies other than the Dollar for financing instruments is not a new policy.
Economist David Sumual notes that the issuance of Panda Bonds is part of a medium-to-long-term financing diversification strategy, particularly given the increasing need for diverse funding and rising trade transactions with China. He explained that the core of this policy is to ensure the government does not rely too heavily on a single currency. He noted that this is a structural strategy rather than a rapid response to the Rupiah’s condition.
Sumual added that the Panda Bond issuance relates to financing needs, specifically addressing the lack of Yuan liquidity amidst increasing trade with Chinese partners. He noted that trade patterns are shifting, with some Indonesian partners requesting payments in Yuan. However, he emphasised that this policy should not be interpreted as a direct attempt to strengthen the Rupiah in the short term.
Other diversification efforts:
Sumual further explained that diversification is not limited to Panda Bonds. Indonesia has implemented various other instruments to reduce single-currency dependency, including currency swap arrangements with countries such as Japan, South Korea, China, and ASEAN members. Additionally, the use of Local Currency Transactions (LCT) in cross-border trade allows for transactions that do not always require the US Dollar.
He assessed that these steps demonstrate that currency diversification is a long-standing, gradual strategy rather than a sudden policy. Despite these efforts, the US Dollar remains the primary currency for Indonesia’s international trade and financial transactions. This dominance is reflected in the global financial structure, where the Dollar remains the main medium of payment. “USD transactions are still dominant. In the global context, for capital market transactions as well as exports and imports, it is around 89 percent,” said David.