The Chinese yuan is taking a larger role in the global markets and is slowly becoming an alternative to the US dollar. The new BRICS member, Indonesia, has announced that it is preparing to launch foreign exchange operations in the Chinese yuan and Japanese yen. Indonesia wants to cut reliance on the US dollar and boost its Local Currency Transactions (LCT). For the unintended, this means that Indonesia will no longer have to convert transactions into the US dollar.
The deal will allow it to settle directly in local currencies and increase its LCT settlements. “This will certainly reduce pressure on the US dollar,” said Bank of Indonesia (BI) Senior Deputy Governor Destry Damayanti. It will also strengthen the domestic foreign exchange market and increase its effectiveness. The BRICS country is making the Chinese yuan the central piece of the foreign exchange operations.
Also Read: BRICS Leads the Way as a New Global Hub of Food Security
BRICS: Indonesia Turns to the Chinese Yuan To Reduce US Dollar Reliance
The BI official confirmed that Chinese yuan cross-border transactions with its BRICS counterpart China, have increased significantly. He stressed that the demand has not been fully met, and Indonesia plans to fill in the void with the new foreign exchange operations.
Damayanti also confirmed that Indonesia’s LCT value with BRICS member China has already reached $1 billion per month. The Chinese yuan will allow Indonesia to bypass the US dollar and cut down on currency conversion. This allows the new BRICS member to save on exchange rates and usher in a new era of monetary operations.
Also Read: BRICS To Start De-Dollarization 2.0 After 2026 Summit?
“This is one of the things we’re trying to improve. We’re opening up instruments for monetary operations and future markets, specifically for the Renminbi-Rupiah,” Destry said in an online press conference announcing the results of the November 2025 RDG. The BRICS bloc is using the Chinese yuan as a foothold to weaken the US dollar’s prospects.