But what about the impact of this decision on Indonesia? The inclusion of China's yuan in the IMF's SDR should strengthen the yuan, at least in theory (and provided that Chinese authorities will not devalue its currency again as it did in August 2015). For Indonesia a stronger yuan would mean that Indonesian exports to China become more attractive (China is Indonesia's top trading partner). Meanwhile, Indonesia's imports from China should become more expensive and a stronger yuan would therefore discourage imports from China. As such, Indonesia's trade balance (as well as its current account balance) would have room to improve. An improvement in both balances would be positive as Indonesia has been plagued by a wide current account deficit (since 2011). Meanwhile, although Indonesia's trade balance remained in a surplus (USD $8.16 billion) in the January-October 2015 period, the country's exports and imports have dropped drastically over the past year due to weakened global and domestic economic activity.

Over the past couple of years, particularly after the ASEAN–China Free Trade Area (ACFTA) came into effect on 1 January 2010, Indonesia has been plagued by a widening trade deficit with China. Based on the latest data from Indonesia's Trade Ministry, Indonesia suffered a USD $10.5 billion trade deficit with China in the first nine months of 2015 (total trade between both countries in this period was valued at USD $32.8 billion). In 2011 this trade deficit with China was still only USD $3.3 billion. As such, more attractive Indonesian exports and more expensive imports from China due to a stronger yuan should have a positive effect on the trade balance between both countries.

Another positive effect of the yuan's inclusion into the SDR is that transactions between Indonesia and China become cheaper as these transactions do not need to be converted into US dollar anymore but can be conducted in yuan/rupiah directly. This will enhance smoothness of trade transactions between both countries. This would also imply that Indonesia becomes a bit less dependent on the US dollar. However, it would help if the macroeconomic fundamentals of China improve and the world's second-largest economy will not use capital controls that block investors from investing in the yuan.

As the yuan is expected to appreciate against the US dollar, China will feel less need to assemble its foreign exchange reserves in US dollars (which is mostly in the form of US Treasury Bonds). This could mean that China will gradually reduce its holding of US Treasury Bonds and this would lead to (relatively small) capital outflows from the USA, which would make the rupiah and other emerging market currencies a bit stronger against the US dollar. However, these would definitely be a long-term process and would require a change in China's fixed rate policy, less capital controls as well as improving economic performance of the world's second-largest economy.

Chinese Yuan (CNY) to Indonesian Rupiah (IDR):

| Source: Bank Indonesia