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.
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