Indonesia, India Support Local Currencies as Iran War Hits EMs

Indonesia and India are actively promoting local currency usage for trade and investment to circumvent reliance on the US Dollar, a strategy gaining urgency as geopolitical tensions, specifically the Iran War, inject volatility into emerging markets. This move aims to insulate their economies from external shocks and de-dollarize their financial systems, potentially leading to increased bilateral trade and greater stability for their respective currencies, the Rupiah and Rupee. Investors should monitor the effectiveness of these measures in mitigating imported inflation and exchange rate fluctuations.