Bank Indonesia proposes to employ a two-way payment system using national currencies.
Bank Indonesia has urged importers and exporters to use national currencies in international payments to reduce the reliance of Indonesian financial markets on the US dollar, according to Tempo.co, an Indonesian news portal.
“About 90% of import-export payments are made in US dollars, while Indonesia’s share of direct exports to the US is estimated at only 10%, and US imports account for 5%,” the manager said. of Solo Bank Indonesia’s representative office, Nugroho Joko Prastowo, told reporters, according to the report.
Prastowo proposed a two-way payment system based on national currencies, saying payments in international currencies incur conversion fees, which double payments in dollars.
China, Japan, Thailand and Malaysia have already agreed to use the two-way payment mechanism, with Singapore and the Philippines planning to join the system, according to the economist.
Financial services firm Sovereign Wealth Management CEO Gary Korolev said Sputnik Thursday that the US dollar is on the verge of no longer being a single reserve currency and will likely compete with the BRICS monetary system.
Read next: US dollar could lose dominance due to Russian sanctions: IMF
On July 22, Russian Foreign Minister Sergey Lavrov said that Russian and African partners were working to reduce, albeit gradually, the trade in the US dollar and euro in mutual trade payments.
“Of course, the current geopolitical situation requires some adjustment of the mechanisms of our interaction: first of all, it is a matter of ensuring flawless logistics and adjusting the system of financial regulations to protect them from external interference. In cooperation with its partners, Russia is taking steps to improve the use of national currencies and payment systems. We are working to gradually reduce the share of the dollar and the euro in mutual trade,” said Mr. Lavrov in an article to African media, published by the Russian Foreign Ministry.
Russia has long advocated for the establishment of an independent and efficient financial system, independent of the SWIFT system, “proof against the potential impact of hostile states”.
Iranian official: China and Russia dump US dollar as ‘very good progress’
What is BRICS?
The BRICS group, made up of emerging economies, has always kept safety and security of its energy infrastructure assets among its priorities, the head of the South Africa-based African Energy Chamber (AEC) said, Nj Ayuk. Sputnik October 12.
“Security of gas and oil infrastructure has long been a key priority for BRICS countries. You need to look at these pipelines because they generate the ability to have energy stability in BRICS countries,” Ayuk told Russian media.
BRICS is a group of five emerging economies, Brazil, Russia, India, China and South Africa, which is an alliance of growing influence in light of the changing balance of power on the international scene.