The country’s central bank governor said that Indonesia is following the lead of BRICS countries in de-dollarization as it ditches the dollar in favor of its local currency.
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Indonesia has become the latest addition to a growing list of countries that have given up settling overseas trade in US dollar and instead have started using its local currency.
Indonesia is following the lead of BRICS in de-dollarization, the country’s central bank governor said.
The BRICS nations – Brazil, Russia, India, China, South Africa – have been ramping up de-dollarization efforts to use local currencies in settling international trade and reduce dependence on the US dollar. They are also working on creating a new currency to facilitate overseas trade.
The final agreement on this is expected to come up by August when the member countries meet for an annual summit in South Africa.
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Indonesia gives up trade in dollar
Addressing a press conference after this month’s board of governors meeting, Bank of Indonesia Governor Perry Warjiyo said, “Indonesia has implemented the local currency trade (LCT) system.”
“Indonesia has initiated diversification of the use of currency in the form of LCT. The direction is the same as the BRICS. In fact, Indonesia is more concrete,” Warjiyo said.
Treasury Secretary Janet Yellen warned in a quote to CNN that the US dollar may lose its dominance if nations are sanctioned.