Indonesia Urged to Rethink Funding Strategy Amid Shifts in Global Liquidity

RRI.CO.ID, Jakarta – As global financial dynamics evolve, Indonesia is being urged to adopt more progressive and precise policies to safeguard its economic future.

Chief Economist at Trimegah Sekuritas Indonesia, Fakhrul Fulvian, stressed that the country must move beyond reliance on the US dollar and begin building alternative funding architectures.

He outlined several priorities: strengthening the local currency settlement (LCT) scheme for bilateral trade, exploring lower-cost currencies such as offshore renminbi (CNH), deepening rupiah-based domestic financial markets -- particularly long-term instruments -- and diversifying the investor base and liquidity sources.

“Indonesia can no longer remain a price taker in the global financial system. We must start acting as architects -- or at least co-architects -- of our own funding sources,” Fakhrul said in a written statement on Monday, April 20, 2026, as quoted by Antara.

While recent IMF and World Bank meetings in Washington, D.C. emphasized macroeconomic stability and global cooperation, Fakhrul argued that these frameworks fall short of addressing structural challenges. “The world has changed much faster than the policy language they use,” he noted.

He pointed to declining global dollar supply, driven by tightening liquidity and rising US domestic financing needs, alongside the growing internationalization of CNH in cross-border trade and financing.

“We see two major currents moving in opposite directions: shrinking dollar liquidity and expanding CNH use. This creates new imbalances but also opens strategic opportunities,” he explained.

Fakhrul described global fragmentation not as a temporary disruption but as a transition toward a multipolar financial system, where access to liquidity will depend increasingly on bilateral networks and flexible domestic policies.

“If we continue to assume global liquidity will always be abundant and cheap, as it was in the past decade, we will be left behind,” he warned.

He emphasized the importance of clear policy communication to maintain market confidence. Without firm direction, Indonesia risks losing momentum in capitalizing on global changes.

“Markets today assess not only stability but also direction. Without clarity on how Indonesia will adapt to fragmentation and liquidity shifts, we risk missing opportunities,” he said.

Fakhrul concluded that Indonesia must act decisively to resolve long-standing financing challenges if it aims to achieve 8 percent economic growth. “Opening CNH financing is part of the solution,” he added. ***