APINDO: Indonesia Can Drive De-dollarization through 2023 ASEAN Chairmanship
Jakarta, Kominfo Newsroom – The Indonesian Employers Association (Apindo) saw that Indonesia could drive regional de-dollarization through the 2023 ASEAN Chairmanship.
"Indonesia's strategic role opens up an opportunity to make a regional agreement that can bring economic benefits for all ASEAN member countries," said Ajib Hamdani, Apindo's economic policy analyst committee chair, in an official statement in Jakarta, Wednesday, 26 April.
Therefore, various strategic policies on de-dollarization must be discussed in a structured manner at the ASEAN Summit on 9—11 May in East Nusa Tenggara (NTT).
According to Ajib, various de-dollarization policies applied with trading partner countries will bring three effects on Indonesia's economy. The first is efficiency because the trade transaction can use the parties' currency.
The second is resiliency because Indonesia can be spared from the global financial crisis threat due to the currency diversification carried out in international transactions. The third is good payment balance and fiscal health, particularly when the US dollar is depreciated and stable.
De-dollarization is a policy of replacing the US dollar as the currency used for trade and other commodities with other currencies. This is part of a government policy that will strengthen the local currency exchange rate against the US dollar.
He said the de-dollarization becomes a global phenomenon taken by developed countries with the same economic orientation, for example, the BRICS members consisting of Brazil, Russia, India, China, and South Africa, which seek ways to reduce the use of the US dollar in transactions between countries.
"China which has a gross domestic product (GDP) reaching US$17.5 billion can be the locomotive of the world's economy. With Russia which can make a global economic contraction, they will significantly impact the political and economic contexts," he explained.
In addition, he said, India has tremendous economic potential because it has a demand from the second largest population in the world, with more than 1.4 billion population.
Previously, Bank Indonesia (BI) Governor Perry Warjiyo expressed similar views with the Indonesian Finance Minister Sri Mulyani Indrawati on de-dollarization. Perry stated that Indonesia had initiated the diversification of currency use, for example, in the Local Currency Transaction (LCT) cooperation mechanism.
Indonesia's Finance Minister said the LCT pattern with trading partner countries should be increased to reduce dependence on the US dollar. (Agatha/TR/Elvira)
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