The international campaign against the dollar’s dominance of global trade and investment flows is pulling more countries in – Indonesia is the latest to join the movement.
The island nation has announced it’s formed a National Task Force to widen the use of local currency transactions (LCT) with partner countries, according to Indonesia’s central bank.
“Bank Indonesia is confident that the National LCT Task Force will be an effective coordination forum to strengthen policy synergy between government ministries and agencies in an effort to increase the use of local currencies in bilateral transactions between Indonesia and major trading partners,” Governor of Bank Indonesia, Perry Warjiyo said in a press release.
The move will also help promote efforts to increase the stability of the rupiah, and enhance the resilience of domestic financial markets, the central bank said.
“LCT implementation is expected to contribute to export-import activities, investment, and cross-border payment transactions, including cross-border QRIS, as well as facilitate securities trading moving forward,” it added.
Indonesia’s move is the latest among a series of actions by nations from China to Russia and India to to move away from the dollar in global transactions, a movement that’s come to be called de-dollarization.
Beijing and New Delhi have initiated trade arrangements to be settled in their respective currencies, while the BRICS bloc has been looking at the possibility of a shared tender.
De-dollarization is an “irreversible process” that’s gaining momentum, Russian president Vladimir Putin said in a video address at the BRICS summit last month.
While some experts perceive de-dollarization efforts as a threat to the greenback, others have dismissed the movement as a nothing burger.
Most recently, Zimbabwe expressed interest in joining a bank founded by the BRICS group of emerging nations – sparking chatter it wants to de-dollarize. But that could result in an economic “disaster,” the country’s former finance minister said.