Indonesia is stepping up efforts to reduce dependence on the US dollar by expanding the use of local currencies in cross-border trade, with transaction volumes rising sharply in early 2026.

Quoting government data, the Jakarta Globe said in a report that under the country’s local currency transaction (LCT) framework, total transactions reached $8.45 billion in January-February 2026, a 163% increase compared to $3.21 billion in the same period a year earlier.

The number of users also went up significantly, averaging 16,030 per month in early 2026, up from 9,720 in 2025.

According to officials, the adoption reflects broader integration of the system across sectors, including manufacturing, energy, transport, trade, and services.

Ferry Irawan, deputy for coordination of state-owned enterprise management and development at the Coordinating Ministry for Economic Affairs, said the framework has steadily expanded since its launch in 2018, adding that it now plays a role in strengthening the rupiah and supporting real-sector activity.

In 2025, Indonesia expanded LCT arrangements to Malaysia, Thailand, Japan, China, South Korea, and the United Arab Emirates as part of measures to deepen regional financial cooperation and encourage local currency use in trade and business activities.

Officials are of the view that Indonesia’s trade structure supports further expansion of the system, with major trading partners operating outside the dollar zone.

The country recorded a trade surplus of $1.27 billion in February 2026, supported mainly by non-oil exports including coal, palm oil and metals.

Bank Indonesia and the government are making joint efforts to advance the initiative to diversify cross-border payment systems, improve market efficiency, deepen financial markets, and help reduce exchange-rate volatility.

In a bid to accelerate LCT implementation, Jakarta has formed a National LCT Task Force involving ministries and agencies to promote wider use of local currencies in international trade.

“Through LCT, the government is committed to providing facilities, incentives, and simplified processes for businesses to improve efficiency, reduce transaction costs, and expand the use of local currencies in international trade,” Ferry said.