India and Indonesia working to lessen dollar reliance – envoy

Yudho Sasongko has cited economic integration, supply chains, and maritime ties as pillars of the bilateral relationship as PM Modi visits Jakarta

Indonesia and India are boosting financial ties via a local currency settlement mechanism to lessen their reliance on the US dollar, a top diplomat has told RT India.

Bank Indonesia and the Reserve Bank of India have agreed on a local currency settlement (LCS) framework for this, the Indonesian Embassy’s deputy chief of mission, Yudho Sasongko, said in an interview given ahead of Indian Prime Minister Narendra Modi’s visit to Jakarta.

Modi was accorded a warm welcome Monday, with Indonesian President Prabowo Subianto welcoming him at the airport. Fighter jets accompanied the prime minister’s plane from the time it entered Indonesian air space.

“Central banks are still working on its operational implementation,” Sasongko said, referring to the mechanism. “Once in place, it is expected to reduce transaction costs, lessen reliance on the US dollar, and facilitate bilateral trade and investment.” 

Quick response (QR) code linkages to facilitate easier retail payments for tourists are also being explored, he said.