Indonesia supports BRICS common currency initiative, experts say

By Al Mayadeen English
Source: Agencies
5 Apr 2023 21:10
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Indonesia plans to make preliminary studies on the creation of a BRICS common currency, but the initiative alone is not sufficient to consider joining the union.

A general view of business buildings as smog covers the capital city of Jakarta, Indonesia, May 19, 2021. (Reuters)

Sources told Sputnik on Wednesday that Indonesia's financial community is supportive of the BRICS initiative to create a common currency that would replace the US dollar as the mutual exchange currency.

"BRICS' new initiative resonates with the progressive part of the Indonesian financial community, with those who strive for de-dollarization and digitalization. As you know, we have also been looking into alternative currencies to substitute US dollar and have started transitioning away from Visa and Mastercard to develop our own paying platforms. We do not want international payment systems to be used to sanction us," Dodit Probojakti, a board member of the Credit Card Association of Indonesia (AKKI), told Sputnik.

Probojakti added that Indonesia plans to make preliminary studies on the creation of a BRICS common currency, but the initiative alone is not sufficient to consider joining the union. There are major geopolitical issues to be wary of, he noted, adding that sole support from the financial sector would not be enough to ensure an overall sense of security.

Another expert, financial market observer Ibrahim Asjuangbi, told Sputnik that he sees "great economic opportunities" in BRICS.

"Many people believe that the BRICS countries are only interested in politics and want to stand against the West, but the main fight is going on in the economic domain, creating common institutions, and not in geopolitics. Russia and China have ended their dependency on Visa and Mastercard, they use their own currency. We have pulled the plug on them too, and this is what brings Indonesia with BRICS together. Besides, Russia has suggested that BRICS should use rare-earth metals as backing of the new currency, and this cannot but attract Indonesia's attention, as the world's largest nickel producer," he said.

Asjuangbi added that in the long run, Indonesia may completely abandon the US dollar as this measure is currently being contemplated by the Jakarta authorities.

On March 30, State Duma Deputy Chairman Alexander Babakov said that the BRICS alliance is working on creating its currency and is scheduled to present ideas on the matter at the organization's forthcoming summit in South Africa in August this year.

Babakov further did not dismiss the possibility of the formation of a single BRICS currency. According to him, the currency would be secured not just by gold, but also by other groups of products, including rare-earth elements of the soil.

On March 16, Indonesian President Joko Widodo called for his country to abandon the use of foreign payment networks like MasterCard and Visa and encouraged the public to adopt credit cards made by domestic banks.

At a local business gathering, Widodo emphasized that "everyone [in Indonesia] should be able to use" Indonesian-manufactured credit cards so that "we can be independent," as he explained that the aim is to avoid risking transactions in case of a geopolitical disruption that could economically affect the country.

According to the President, the initiative "shows that Indonesia is following the pace of digital technology transformation in the economic sector."