Indonesia Joins Dollar Abandoning Process

The Jakarta government has joined the global movement to phase out the use of the US dollar in international payments. To minimize the dependence of the national economy on the dollar, Indonesia has created a special Task Force to promote greater use of local national currencies in transactions and trade with partner countries. This decision was announced on the sidelines of the recent ASEAN summit and then implemented by Governor of Bank Indonesia (Indonesian Central Bank) Perry Warjiyo. “The transition to national currencies for making payments and other trade transactions with friendly countries will not only help strengthen the Indonesian financial market, but also stabilize the exchange rate of the Indonesian rupiah,” Warjiyo emphasized.

The Task Force operations involve several ministries and departments of the Indonesian government, including the Central Bank of the country and the Ministries of Economy, Finance, and the Indonesian Financial Services Authority (OJK).

Indonesia is the seventh largest economy in the world and, according to many international analysts, “will rise in the ranking by another 2-3 positions within 10 to 20 years.” In terms of population – 280 million people – the country ranks fourth in the world.
The creation of the Task Force was “an important milestone in Indonesia’s new financial strategy,” writes Indonesian news agency Antara News.

In addition, Indonesian authorities believe that “increasing the volume of transactions in national currencies can significantly increase the volume of the country’s foreign trade, raise the flow of foreign investment into Indonesia, as well as contribute to the development of a modern system of cross-border financial transactions.”

The BRICS countries – Brazil, Russia, India, China, and South Africa – are also working in the same direction. Indonesia is not yet a member of this group, but its President Joko Widodo attended the recent BRICS summit in Johannesburg last August as a guest of honor.