Jakarta, IO – A number of countries have started to reduce their dependence on the US dollar which has dominated global trade for decades as reserve currency.
This step was taken to reduce exposure to the impact of US policies which have affected the economies of many countries, reported Katadata, Wednesday (26/4).
IMF data shows that the market share of the USD has been on a decline since 2000. Currently, several countries are starting to look for alternatives to the US dollar to finance cross-border trade and investment. One of them is China, which has long been the largest holder of US securities.
In addition to reducing dollar holdings in its foreign exchange reserves, China has also begun to aggressively increase trade with other countries using its own currency. Brazil and Russia are starting to follow suit.
India has also begun to established trade and investment agreements financed by local currency, for example with Malaysia and soon Indonesia.
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Indonesia has also begun to reduce its reliance on US dollar. The government has implemented cooperation using local currencies in trade and investment transactions with a number of countries, such as Japan, China and Thailand.
In addition, Bank Indonesia is also promoting cross-border payment cooperation among ASEAN countries and expanding cooperation in the use of local currencies with other countries such as South Korea, India and Saudi Arabia. (un)