- Indonesia plans to launch foreign exchange operations using the Chinese yuan and Japanese yen.
- The move aims to reduce Indonesia’s dependence on the U.S. dollar and increase Local Currency Transactions (LCT).
- Cross-border transaction volume between Indonesia and China using the yuan is about $1 billion per month.
- Indonesia’s efforts support broader BRICS objectives to lessen the dominance of the U.S. dollar.
Indonesia, a new member of the BRICS group, announced plans in November 2025 to initiate foreign exchange operations featuring the Chinese yuan and Japanese yen. This initiative aims to decrease the country’s reliance on the U.S. dollar and promote Local Currency Transactions (LCT), allowing settlements without currency conversion to the dollar. The announcement was made by Bank of Indonesia (BI) Senior Deputy Governor Destry Damayanti during a press conference noted here.
The program enables Indonesia to settle trade and financial transactions directly in local currencies, which helps reduce pressure on the U.S. dollar. The effort also seeks to strengthen Indonesia’s domestic foreign exchange market and improve its overall efficiency. The Chinese yuan will serve as the primary currency in these operations due to its growing role in cross-border trade, especially with China, already a key BRICS partner.
Cross-border settlements between Indonesia and China currently reach approximately $1 billion monthly. However, there remains unmet demand for yuan currency operations. As Damayanti indicated, this gap will be addressed through newly introduced foreign exchange mechanisms. The yuan’s increasing usage allows Indonesia to reduce currency conversion costs and avoid fluctuating exchange rates linked to the U.S. dollar.
The plan also includes expanding instruments for monetary operations and future market activities, specifically developing Renminbi-Rupiah interactions. This aligns with wider BRICS efforts aimed at diversifying and reducing the dominance of the U.S. dollar in international trade and finance, as stated during the November 2025 Roundtable Discussion Group (RDG).
For more information, see the official comments from Bank of Indonesia here and the related monetary plans outlined here.
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