Jakarta. Indonesia’s local currency transactions have hit nearly $7 billion, according to the central bank, amidst a global effort to distance itself from the American dollar.
Bank Indonesia and its Chinese counterpart, the People’s Bank of China, established the local currency settlement framework in 2021, which cleared the way for current account transactions and direct investments being settled in either rupiah or yuan. The central banks expanded its scope to cover all balance-of-payments items after launching the local currency transaction framework in September. This followed a memorandum of understanding (MoU) signed during Chinese Premier Li Qiang’s Jakarta visit in May.
“We continue to expand our local currency transactions not just with the ASEAN member states, but also China and Japan. The transactions that Indonesia has recorded with China using local currencies reached nearly $7 billion,” Bank Indonesia’s governor Perry Warjiyo told a press conference in Jakarta on Monday.
“The transactions with Japan reached $5 billion worth of local currencies.”
Perry did not specify the time frame of the accumulated transactions made in yuan or rupiahs.
However, the bank had previously reported that the local currency transactions with China had totalled $6.23 billion so far this year as of July. This was the highest compared to other countries that Jakarta had struck similar deals with, including Japan ($5.08 billion), Malaysia ($2.03 billion), Thailand ($644 million), South Korea ($85 million), and the United Arab Emirates ($72 million). Indonesia-China deals accounted for approximately 45 percent of all the local currency transactions that the Southeast Asian country recorded in the first seven months of 2025.
A trial to connect Indonesia’s QR payment system, QRIS, with that of China is now underway. The cross-border QR linkage is expected to be fully operational within this year. The use of local currencies has become Jakarta’s go-to strategy to cut its reliance on the American dollar, which can fluctuate at times.
China remains Indonesia’s top trading partner and biggest deficit contributor.
Earlier that day, the Central Statistics Agency (BPS) reported that Indonesia’s overall deficit with China had swollen to $14.32 billion between January and September 2025. The trade imbalance used to stand at around $8.72 billion in the same nine-month period the previous year. Mechanical and electrical equipment made up a huge chunk of Indonesia’s non-oil imports from China, followed by automotives.
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