Jakarta. Indonesian businesses are starting to adjust to a global shift away from the US dollar, as authorities accelerate efforts to expand the use of local currencies in cross-border trade.

Government data show transactions under the local currency transaction (LCT) framework surged 163% year-on-year to $8.45 billion in January–February 2026, up from $3.21 billion in the same period last year. The number of users climbed to 14,621 in February, with average monthly users reaching 16,030, well above the 2025 average.

The increase signals early adoption among companies seeking greater flexibility and lower transaction costs, particularly in bilateral trade. Still, business groups say de-dollarization should be seen as diversification rather than a fundamental shift away from the US dollar.

“The global economy is becoming more multipolar, but the US dollar remains the main anchor,” said Anne Patricia Sutanto, trade chairwoman at the Indonesian Employers Association (Apindo). According to data from the Bank of International Settlements and other sources, the dollar is still involved in about 88% of global foreign exchange transactions and around 40% of world trade invoicing.

Indonesia expanded LCT cooperation in 2025 to six key partners — Malaysia, Thailand, Japan, China, South Korea and the United Arab Emirates — as part of a broader push to reduce dollar dependence and support rupiah stability. The currency recently weakened to around Rp 17,300 per dollar, its lowest level on record.

Businesses say the shift to local currencies offers efficiency gains, particularly by reducing double conversion and transaction costs. However, Anne cautioned that the benefits depend on market readiness and sector-specific supply chain structures.

“Challenges remain, including limited liquidity and shallow markets for non-dollar currencies, which can lead to wider spreads, higher hedging costs, and increased volatility,” Anne said.

Exporters take a pragmatic view. Benny Soetrisno, chairman of the Indonesian Exporters Association (GPEI), said currency use largely depends on agreements between buyers and sellers, backed by financial institutions. “Most buyers still use the US dollar,” he said, adding that local currency transactions are manageable as long as exchange rates are agreed.

Benny said he hopes wider adoption of local currency settlement will provide greater certainty in the value exporters receive in rupiah.

Bank Indonesia is also strengthening payment infrastructure to support the transition, including the planned launch of cross-border QRIS connectivity with China on April 30 following a successful trial period.

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