Indonesia Leaves the Dollarzone

The largest Muslim nation in the world has abandoned the US trade dollar:

Indonesia is following the lead of the BRICS group in its policy of shifting away from the US dollar in trade and financial transactions, according to the country’s central bank.

Jakarta has introduced transactions in the local currency to settle cross-border trades, the portal SINDOnews has reported, citing Bank of Indonesia Governor Perry Warjiyo.

“Indonesia has initiated diversification of the use of currency in the form of LCT [local currency trading]. The direction is the same as the BRICS. In fact, Indonesia is more concrete,” Warjiyo said on Friday, addressing a press conference with the board of governors meeting.

Indonesia has already implemented the practice with a number of countries, such as Thailand, Malaysia, China, and Japan, he added. It also plans to sign a cooperation agreement with South Korea regarding local currency trading in early May.

Warjiyo’s statement comes as the BRICS economic bloc – comprising Brazil, Russia, India, China, and South Africa – claims to be working on establishing a joint payment network to cut reliance on the Western financial system, and on the dollar in particular.

In related news, India and Bangladesh have dropped the dollar for use in their bilateral trade.

India and Bangladesh are moving away from using the US dollar in bilateral trade, the Bangladesh-based news website The Business Standard reported this week. According to the report, the two countries have reached a deal that will see a part of trade transactions carried out in their respective domestic currencies, the rupee and the taka.

It’s fascinating to see that the imperial overstep by the United States was not an invasion like Syracuse or even the suppression of a potential military rival like the World Wars fought between England and Germany, but the weaponization of its financial hegemony.

I always expected de-dollarization to follow both a) an economic crisis and b) a major military defeat, but instead, it appears to have preceded both due to the very rational fears of countries observing how Russia was attacked economically via the global dollar system.