Antara News·Indonesia·Wednesday, September 23, 2026 at 10:55 PM

Indonesia's LCT volume hits record US$49.4B through August 2026

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Rizka Khaerunnisa, Yashinta Difa

Jakarta (ANTARA) - Local Currency Transaction (LCT) volume between Indonesia and its trading partners reached a record equivalent of US$49.4 billion through August 2026, nearly double the total recorded for all of 2025, according to Bank Indonesia (BI).

Speaking at a press conference here on Wednesday (September 23), BI Deputy Governor Thomas Djiwandono highlighted the rapid adoption of local currency settlement frameworks, which recorded total trade of US$25.7 billion throughout last year.

"By the end of 2026, the figure will certainly be more than double that of last year," Thomas told reporters following the BI Board of Governors Meeting.

He said LCT transactions had shown strong growth and were expected to become a structural element supporting Indonesia's long-term economic stability.

Indonesia currently maintains active LCT arrangements with seven countries: China, Japan, Malaysia, Thailand, South Korea, the United Arab Emirates, and Singapore. BI is expanding the network, with bilateral negotiations underway to add India, the Philippines, and Hong Kong.

To sustain the momentum, BI has introduced targeted foreign exchange incentives, including a 10-percent increase in premiums for buy-swap hedging and a 10-percent discount on premiums for Domestic Non-Deliverable Forward (DNDF) sell-swap hedging.

The expansion coincides with surging demand for the Chinese yuan (RMB) in domestic trade and investment. Year-to-date yuan demand had risen more than 200 percent to 277.5 billion RMB, equivalent to approximately US$41.4 billion, by August.

"Driven by trade and investment transactions between China and Indonesia, demand for the RMB has been steadily increasing. So, the demand is immense," Thomas said.

To support the growing demand, BI confirmed that an official RMB Clearing Bank will begin operations in October 2026. The facility is expected to provide direct yuan liquidity to domestic markets, deepen the rupiah-RMB ecosystem, and help stabilize foreign exchange rates.

Alongside the growth in currency settlement, BI also unveiled Vastra, a streamlined foreign exchange framework designed to facilitate foreign portfolio investment in Indonesian assets.

The Vastra ecosystem connects registered global investors with domestic banks through designated offshore banks. Under the framework, investors register their initial activities directly with BI, while subsequent transactions will not require underlying documentation, simplifying the investment process for foreign portfolio investors.

The framework currently covers Government Securities (SBN), Bank Indonesia Rupiah Securities (SRBI), and Bank Indonesia Sukuk (SukBI). BI is coordinating with the Financial Services Authority (OJK) to expand Vastra's scope to include equity investors in the capital market next year.

"This represents a new pathway that facilitates the entry of portfolio investors into Indonesia; it is a genuine innovation," Thomas said.

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