Government Promotes Multilateral Cooperation Without Using the US Dollar

The Indonesian government is promoting financial transactions in cooperation with several countries to no longer use the United States (US) dollar. Deputy for Coordinating the Management and Development of State-Owned Enterprises (BUMN) in the Coordinating Ministry for the Economy, Ferry Irawan, stated that the government and Bank Indonesia (BI) are continuously promoting the framework for local currency transactions (Local Currency Transaction/LCT). The use of local currencies or non-US dollar aims to diversify inter-country payment transactions, improve market efficiency, and deepen financial markets. “Ultimately, it reduces exchange rate volatility while strengthening economic resilience,” said Ferry, as quoted from an official statement on Saturday (11/4/2026). This is because most of Indonesia’s main trading partners are countries that do not use the US dollar. This is evident in Indonesia’s Trade Balance, which recorded a surplus of $1.27 billion in February with several non-oil and gas export commodities such as coal, iron, steel, and crude palm oil (CPO). The government also noted that State-Owned Enterprises (BUMN) have participated in local currency transactions up to 10-19 percent. In 2025, the government has implemented LCT with six main partner countries, namely China, Japan, South Korea, Malaysia, the United Arab Emirates, and Thailand. This cooperation is also supported by the expansion of bilateral regulations. This indicates increasing regional financial cooperation and wider use of local currencies. The government also recorded that LCT transactions continue to increase consistently. Throughout January-February this year, LCT transactions reached $8.45 billion. This figure increased compared to January-February 2025 at $3.21 billion. “This growth is also supported by an increase in the number of users reaching 14,621 in February 2026, with an average of 16,030 users per month, far above the 2025 monthly average of 9,720 users,” said Ferry. The implementation of LCT, he said, is supported by the Monitoring and Supervision Mechanism, Appointed Cross Currency Dealer (ACCD), and flexibility in Foreign Exchange Administration (FEA). To encourage the implementation of LCT, the government has formed the National LCT Task Force. The team consists of 10 ministries/institutions tasked with strengthening coordination, developing policies, and adopting local currencies in exports-imports. “The development of LCT is a concrete and strategic step towards increasing efficiency, reducing external vulnerabilities, and strengthening multilateral financial cooperation,” Ferry stated.