Jakarta. Indonesia's cross-border transactions using local currencies with seven partner countries reached $52.6 billion in the first nine months of 2026, more than double the $25.7 billion recorded throughout 2025, Bank Indonesia said Tuesday.

The sharp increase reflects the central bank's efforts to reduce reliance on the US dollar in international transactions and strengthen the rupiah's resilience against global financial volatility.

Bank Indonesia Governor Destry Damayanti said the expansion was supported by closer financial cooperation with Malaysia, Thailand, Japan, China, South Korea, the United Arab Emirates and Singapore.

"Local currency transactions have shown positive progress, reaching $52.6 billion from January to September, twice the total of $25.7 billion recorded for the whole of 2025," Destry told a press conference at Bank Indonesia headquarters in Jakarta.

The local currency transaction (LCT) framework allows businesses and financial institutions to settle eligible cross-border transactions using participating countries' currencies instead of relying on the US dollar as an intermediary.

The initiative is intended to reduce foreign exchange conversion costs, diversify currency usage, and help mitigate exchange rate risks.

Rupiah Remains Under Pressure
Despite the rapid expansion in local currency transactions, the rupiah has weakened against the US dollar amid persistent global uncertainty.

Destry said the currency depreciated from Rp 17,830 per dollar at the end of September to Rp 18,145 on Nov. 2, a decline of approximately 1.8%.

"The depreciation was influenced by escalating geopolitical conflict in the Middle East, continued monetary policy tightening in the United States, and global investor sentiment toward emerging-market assets," Destry said.

Indonesia's foreign exchange reserves stood at $146.3 billion at the end of September 2026.

According to Destry, the reserves were sufficient to cover five months of imports and government external debt payments, remaining comfortably above the international adequacy benchmark of three months of imports.

Foreign Capital Flows Show Signs of Recovery
Foreign portfolio investment recorded net outflows of $80 million in the third quarter of 2026, primarily driven by withdrawals from the stock market.

However, capital flows improved at the beginning of the fourth quarter.

From the start of October through Oct. 23, Indonesia recorded net foreign portfolio inflows of $40 million, supported by investment in government securities (SBN) and Bank Indonesia Rupiah Securities (SRBI).

"With these developments, foreign portfolio investment flows from January through Oct. 23, 2026, recorded net inflows of $13.23 billion," she said.

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