Indonesia Reduces US Dollar Reliance as Local Currency Transactions Reach Rp 400 Trillion

Makassar — Indonesia’s efforts to reduce reliance on the US dollar are beginning to demonstrate tangible results. Bank Indonesia (BI) has recorded Local Currency Transaction (LCT) volumes in January-April 2026 reaching USD 22.61 billion, equivalent to approximately Rp 400.19 trillion based on an exchange rate of Rp 17,700 per US dollar.

Transactions using domestic currency surged 309 per cent year-on-year compared to the same period last year, which totalled USD 7.33 billion. This increase reflects growing use of Indonesia’s domestic currency in international trade and cross-border transactions.

Ruth A. Cussoy Intama, Director of BI’s Financial Market Development Department, stated that the growth in LCT transactions demonstrates Indonesia’s strengthening efforts to reduce US dollar dependence amid global uncertainty.

“This covers only January through April. Hopefully it will continue to rise, both in volume and number of participants,” Ruth said during a media briefing in Makassar on Friday, 21 June 2026.

Ruth explained that the trend towards local currency usage is expanding because many countries are increasingly recognising the importance of transaction efficiency in bilateral trade, particularly as international trade tensions rise.

According to her, several countries that previously delayed implementing local currency transaction agreements are now accelerating their implementation.

“With specific considerations, they naturally have certain considerations, just as we do. However, ultimately they realised that we should expedite this,” she said.

However, for countries with substantial direct trade relationships with Indonesia, using domestic currency is considered more efficient than having to convert through US dollars first.

“For countries whose transactions are already substantial and direct, they can use domestic currency — why should we use US dollars first? Because if you go through intermediaries, there will definitely be middlemen involved and efficiency will suffer,” she explained.

Under this scheme, exporters and importers can transact directly using domestic currency without needing to use the US dollar as an intermediary currency.

Currently, Indonesia’s LCT implementation is operational with Malaysia, Thailand, Japan, China, South Korea and Singapore. BI is also expanding cooperation with other countries, including India and Saudi Arabia.