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Indonesia introduces de-dollarization task force

Jakarta Globe - September 5, 2023

Arnoldus Kristianus, Jakarta – Indonesia on Tuesday unveiled the National Task Force for Local Currency Transactions, a strategic initiative aimed at reducing the country's reliance on the US dollar in international transactions while promoting the use of its local currency.

This task force represents a collaborative effort involving key entities such as the central bank, relevant ministries, the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS).

Bank Indonesia Governor Perry Warjiyo said this task force will enhance coordination among government agencies in the policy-making process and facilitate an increase in the utilization of local currencies in bilateral transactions between Indonesia and its partner countries.

The memorandum of understanding formalizing the task force was signed on the sidelines of the ASEAN Summit in Jakarta and was witnessed by President Joko Widodo.

Earlier this year, during the ASEAN Summit in Labuan Bajo, East Nusa Tenggara, regional leaders reached a consensus on using their respective currencies in regional transactions to bolster economic integration within the bloc.Last month, Bank Indonesia inked an agreement with Bank Negara Malaysia and the Bank of Thailand, aimed at promoting the use of local currencies in transactions among these countries.

The establishment of this task force is expected to have several positive impacts, including bolstering the stability of the rupiah exchange rate, contributing to the expansion of export, import, and investment activities, and expediting the implementation of cross-border QR codes to facilitate an integrated digital payment system that obviates the need for currency exchanges.

Indonesia has also entered into local currency transaction agreements with Japan and China and is actively pursuing similar arrangements with Singapore and South Korea.

Source: https://jakartaglobe.id/business/indonesia-introduces-dedollarization-task-forc