Long process is needed before other currencies could be used as a reference in trade transactions, President Director of Institute for Development of Economic and Finance (Indef) Didiek J. Rachbini said here on Wednesday.
"In my estimate it would take two or three decades, and it is not easy," Didiek J. Rachbini said when asked to comment on the statement of President Joko Widodo.
Earlier this week, Jokowi told a group of Indonesian economists to not peg the rupiah on the US dollar, saying Chinese yuan, and Japan yen were more relevant.
Jokowi said the United States came on third after China and Japan in Indonesias list of major trading partners.
Didiek said with his statement, the president wanted to tell the market players to look at the domestic economic condition comprehensively and proportionally, not merely based on the rupiah value against the dollar.
The reason is that the United States is not the largest trading partner of Indonesia.
Jokowi said the United States accounted for only 9-10 percent of the countrys foreign trade in value with China accounting for 15 percent, the European Union for 11.4 percent and Japan for 10.7 percent.
Didiek described as a good idea the Jokowis call for not pegging the rupiah only on the dollar.
"Certainly to become a benchmark will need a long process," he said.
Replacing the role of the US dollar in international trade would also need agreement or consensus among trading partners, he added.
He said countries in East Asia have reduced the use of the US dollar in trade transactions.
Indonesia could reduce the use of the dollar, but caution is necessary in using new benchmark, he said.
For example, the Chinese economic slowdown should be considered before deciding to use yuan in place of the US dollar, he said.
"It is also necessary to see whether Indonesian banks have enough yuan in reserve. Now dollar is still dominant," he said.
Executive director of economic and monetary policy of Bank Indonesia Juda Agung said so far Indonesia has used not only dollar as a reference.
In indicator "Real Effective Exchange Rate" (REER), Indonesia also uses the currencies of other trading partners such as China, Japan, the EU and Thailand.
In order to reduce dependence on the dollar, Indonesia also uses bilateral cooperation with a number of its trading partners through "bilateral currency swap agreement (BCSA)."
With BCSA, trade transactions does not necessarily use the U.S. dollar, he said, adding the currency of each country involved in the trade transactions, could be used.(*)
Editor: Heru Purwanto
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