Indonesia expands barter trade to curb US dollar reliance

Indonesian Trade Minister Budi Santoso speaks with reporters after an exclusive meeting on food commodity price developments in Jakarta on June 9. (ANTARA)

Indonesia is expanding its countertrade framework to reduce its reliance on the US dollar as the rupiah plummets to a historic low.

Speaking on June 9 after an exclusive coordination meeting on food commodity price developments, Trade Minister Budi Santoso informed reporters that the government is preparing a new barter mechanism that is expected to help ease the demand for greenbacks and preserve foreign exchange reserves, as trade will not be conducted using American currency.

He underscored that the government has already worked on countertrade cooperation with several countries, including the Philippines. Such collaboration, he said, is a follow-up action from the previous 48^th ASEAN Summit sideline meetings, namely the ASEAN Joint Foreign and Economic Ministers.

According to Minister Budi, Jakarta had proposed a barter arrangement with Manila valued at around 350 million US dollars. To implement it, the minister noted that he will meet Philippine business delegations on June 12. He said that both parties have recently explored barter transactions for growing export sectors, namely abaca fiber and textiles, as well as iron ore and steel products

“We hope that other products can also be included in the future,” he added after explaining that “if our exports increase, foreign exchange earnings will also increase”. He also underscored the government’s efforts to maintain domestic price stability through the enactment of import duty exemptions for some commodities, including plastic raw materials and liquefied petroleum gas (LPG).

In addition, the minister told reporters that authorities are actively “monitoring and taking anticipatory measures” on the rupiah, with the hope that “the prices of imported commodities will not increase”.

What does this mean for businesses?

For commercial enterprises, this strategic pivot shields operations from volatile foreign exchange risks by bypassing US Dollar conversions entirely. By utilising a direct goods-for-goods settlement mechanism via designated state-appointed agents, manufacturers can secure a stable, predictable supply of raw materials despite the historic-low rupiah. Furthermore, this bilateral accord streamlines trade logistics, protects operating margins against escalating import costs, and opens up highly predictable export pipelines into regional markets.

Kala Advisory helps investors navigate openings like these as Southeast Asia reshapes how its trade and currency risk work. Visit kala-advisory.com.