Indonesia pushes for more local currency transactions

By Alimat Aliyeva

Indonesia is actively working to expand the use of local currency transactions (LCT) to improve cost efficiency and strengthen financial resilience, a senior government official announced on Wednesday, Azernews reports, citing foreign media.

Ferry Irawan, Deputy for Coordination of Management and Development of State-Owned Enterprises (SOEs) at the Coordinating Ministry for Economic Affairs, emphasized that a wider adoption of LCT could involve not only SOEs but also ministries and various government institutions.

“State-owned enterprises play a strategic role in Indonesia’s international transactions. By using local currencies, we can reduce transaction costs, support exchange rate stability, and enhance corporate financial resilience,” said Irawan, who also chairs the National Local Currency Transaction Task Force.

Despite the benefits, Irawan acknowledged that currently only a limited number of SOEs utilize local currencies in their cross-border dealings.

To accelerate adoption, he called on technical ministries to actively promote the use of LCT in foreign trade, investments, and transactions with partner countries.

“We must embed LCT into our corporate strategies, treating it not merely as a technical tool but as a key component of sustainable business practices,” he added.

This push aligns with a broader global trend where countries aim to reduce dependence on major reserve currencies such as the US dollar. By expanding LCT, Indonesia hopes to mitigate risks associated with currency fluctuations, reduce exposure to external shocks, and boost economic sovereignty.

Moreover, wider use of local currencies in regional trade could strengthen economic ties within ASEAN and neighboring countries, paving the way for more resilient and integrated financial systems in Southeast Asia.

As Indonesia continues to grow as an emerging market, this initiative may set a precedent for other developing economies looking to enhance financial stability and promote sustainable growth in an increasingly volatile global economy.