RRI.CO.ID, Makassar - The use of local currencies in Indonesia’s international transactions surged in early 2026, with Bank Indonesia (BI) viewing the trend as a way to diversify transactions and reduce dependence on the US dollar.

BI reported that the volume of local currency transactions (LCT) reached USD 22.61 billion from January to April 2026. This marks a sharp increase compared to USD 7.33 billion in the same period last year and is close to the full‑year total of USD 25.72 billion in 2025.

“The volume has risen significantly. This drives currency diversification, meaning not everything has to go through the US dollar,” said Director of BI’s Financial Market Deepening Department, Ruth A. Cussoy Intama, during a media discussion in Makassar, South Sulawesi, on Friday, May 22, 2026, as quoted by Antara.

China, Japan, and Malaysia are the main partners in LCT transactions, accounting for 89 percent, 6 percent, and 3 percent, respectively. As of April 2026, the average number of participants reached 5,265 per month.

Ruth explained that bilateral transactions using local currencies are more efficient than using the US dollar as an intermediary. The cross‑conversion scheme, which requires two exchanges, has forced businesses to bear additional costs.

“It’s not that we are avoiding or rejecting the US dollar; we know the global economy still relies on it. But for countries where transactions can be conducted directly in domestic currencies, there are many such cases, so why must we use the dollar first?” she said.

BI noted that LCT implementation is carried out through Appointed Cross Currency Dealers (ACCDs) designated by each country’s central bank. This mechanism enables exporters and importers to transact directly in domestic currencies.

Indonesia has established LCT partnerships with Malaysia, Thailand, Japan, China, South Korea, and the United Arab Emirates. BI is also working to expand cooperation with Saudi Arabia, Singapore, and India.

“We know there’s significant demand for the Saudi riyal; that’s what we’re focusing on. We’re exploring how to use LCT, ideally without involving the dollar, to establish a direct arrangement with Saudi Arabia,” Ruth added. ***