Indonesia is following the BRICS’ lead in de-dollarization and shifting away from the U.S. dollar in trade settlements and financial transactions, according to the country’s central bank governor. The BRICS nations are working on creating a common currency to reduce their USD reliance.
Indonesia’s De-Dollarization Efforts
Bank of Indonesia Governor Perry Warjiyo said Friday that Jakarta is following the lead of the BRICS bloc to shift away from using the U.S. dollar in trade and financial transactions, Sindonews reported Friday. The BRICS nations (Brazil, Russia, India, China, and South Africa) have been ramping up de-dollarization efforts to use local currencies in international trade and reduce their dependence on the USD. They are also working on establishing a new currency.
Speaking at a press conference following this month’s board of governors meeting, the central bank chief confirmed that Indonesia has implemented the local currency trade (LCT) system. He was quoted as saying:
Indonesia has initiated diversification of the use of currency in the form of LCT. The direction is the same as the BRICS. In fact, Indonesia is more concrete.
He explained that Indonesia’s LCT system is considerably more concrete than the BRICS de-dollarization approach, given that Indonesia has already implemented the currency diversification method with several nations, including Thailand, Malaysia, China, and Japan. In addition, the Indonesian government plans to sign an agreement with South Korea regarding local currency transactions in early May, he noted.
As the U.S. continues to weaponize the dollar, countries are seeking alternatives, from creating new common currencies to using local currencies. U.S. Treasury Secretary Janet Yellen recently admitted that economic sanctions used against countries by the U.S. put the dollar’s dominance at risk.
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