Indonesia Is Following BRICS De-Dollarization Lead, Says Central Bank Governor – According to Sindonews, the Governor of the Bank of Indonesia, Perry Warjiyo, stated that Jakarta is taking cues from the BRICS group to move away from utilizing the US dollar for trade and financial dealings. The BRICS member countries, including Brazil, Russia, India, China, and South Africa, are intensifying their efforts to de-dollarize and employ their own currencies in global trade, aiming to decrease their reliance on the USD.
Additionally, they are collaborating to establish a new currency. During a press conference held after the board of governors meeting this month, the head of the central bank stated that Indonesia has successfully put in place the local currency trade (LCT) system. This system enables domestic currencies to be used in international transactions, reducing the dependence on foreign currencies like the US dollar.
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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.” During a recent statement, the central bank chief emphasized that Indonesia’s LCT system is more advanced than the de-dollarization approach adopted by BRICS nations.
This is because Indonesia has already implemented the currency diversification method with various countries, such as Thailand, Malaysia, China, and Japan. Moreover, the government of Indonesia is set to sign a local currency transaction agreement with South Korea in early May, further strengthening the LCT system.
As the United States continues to employ the US dollar as a weapon, many countries are exploring alternative options. They are considering new common currencies or embracing local currencies to reduce their dependence on the US dollar. The US Treasury Secretary, Janet Yellen, recently acknowledged that the US’s use of economic sanctions against other countries is putting the dollar’s dominance at risk.
Therefore, many countries, including Indonesia, are proactively taking measures to minimize the risks associated with being dependent on a single currency. These efforts are expected to bolster their economic autonomy and resilience in the face of future uncertainties.
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As the US’s use of economic sanctions continues to threaten the dollar’s dominance, many countries are exploring alternative options to safeguard their economies. Therefore, the implementation of the LCT system is a promising development that could bring benefits such as reduced transaction costs and currency risks, strengthened financial systems, and increased economic growth.