Blog > Marketplace News > Indonesia Promotes The Use of Local Currency Settlement To Get Rid of Dependence on The US Dollar
Indonesia Promotes The Use of Local Currency Settlement To Get Rid of Dependence on The US Dollar
Jayson 31 Jan 2024 09:13
Bank of Indonesia Governor Perry Warjiyo said on the 30th that, following China and South Korea, Indonesia will use local currencies for settlement in cross-border trade and investment with India and Saudi Arabia.
"We will continue to expand the use of the national currency. With the local currency settlement mechanism, Indonesia's macro stability will continue to be strongly maintained because it will not depend on the supply of U.S. dollars."
So far, six of the ASEAN member countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, have agreed to use their local currencies for settlement.
According to the memorandum of understanding signed by the People's Bank of China and the Bank of Indonesia on September 30, 2020, China and Indonesia will officially launch the China-Indonesia local currency settlement cooperation framework from September 6, 2021.
Indonesia's central bank's local currency settlement business showed a substantial growth trend last year. As of December 2023, the local currency settlement transaction volume reached US$5.9 billion, an increase of 55.2% compared with December 2022.
At the ASEAN Finance Ministers and Central Bank Governors Meeting in March 2023, ASEAN member states agreed to strengthen the use of local currencies in the region and reduce reliance on current major international currencies in cross-border trade and investment.
"We will continue to expand the use of the national currency. With the local currency settlement mechanism, Indonesia's macro stability will continue to be strongly maintained because it will not depend on the supply of U.S. dollars."
So far, six of the ASEAN member countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, have agreed to use their local currencies for settlement.
According to the memorandum of understanding signed by the People's Bank of China and the Bank of Indonesia on September 30, 2020, China and Indonesia will officially launch the China-Indonesia local currency settlement cooperation framework from September 6, 2021.
Indonesia's central bank's local currency settlement business showed a substantial growth trend last year. As of December 2023, the local currency settlement transaction volume reached US$5.9 billion, an increase of 55.2% compared with December 2022.
At the ASEAN Finance Ministers and Central Bank Governors Meeting in March 2023, ASEAN member states agreed to strengthen the use of local currencies in the region and reduce reliance on current major international currencies in cross-border trade and investment.
