Indonesia Pursues BRICS Bank Seat for Local Currency Loans

Indonesia confirmed it is actively negotiating to join the New Development Bank. The move targets financing in local currency to lower transaction costs. Jakarta seeks to reduce dependence on dollar-denominated debt from the IMF and World Bank.

Tri Tharyat, a foreign ministry advisor, stated that internal coordination is underway. He described the NDB as a flexible alternative to Western lenders. The bank allows borrowers to receive funds in their own currency.

Political Momentum Drives Membership Push

President Prabowo Subianto requested membership during a meeting with NDB President Dilma Rousseff in 2025. Indonesia joined the broader BRICS bloc in early 2025. The New Delhi summit in 2026 urged expedited consideration for new applicants.

BRICS leaders reiterated support for expanding the bank’s membership. They agreed to roll out loans in local currencies. This shift aims to cut the region's reliance on the US dollar.

Capital Structure and Portfolio Scale

The NDB has approved at least $42.9 billion in financing so far. Funds support clean energy, transport, and sanitation projects. Original members hold 18.72% of subscribed capital each.

Recent expansions include Bangladesh, the UAE, Egypt, Algeria, and Uzbekistan. Senior minister Airlangga Hartarto said Indonesia would invest $1 billion in the bank. This contribution would secure a shareholder status.

Strategic Shift in Lending Terms

The NDB offers less strict conditions than the IMF or World Bank. Borrowers can access funds without stringent policy conditions. This structure aligns with the needs of developing economies.

According to GN markets/fx (en-US), the bank accepts both borrowing and non-borrowing members. Indonesia’s accession process remains in the early coordination stage. No specific timeline for formal membership has been disclosed.