Testing ASEAN’s resilience amid the global debt surge

Fifth, the trend toward increased use of Local Currency Transactions (LCT). In an article published in IMF Finance & Development magazine, an article entitled "Asia's Pragmatic Currency Pivot" by Dong He, Chief Economist of the ASEAN+3 Macroeconomic Research Office (AMRO), was published in September 2026. In the study, Dong He stated that ASEAN+3 countries are beginning to move toward currency diversification in international trade and finance. This means that in trade between countries, dependence on the US dollar is gradually beginning to decline. Although more than 80% of trade invoicing and nearly 85% of foreign-exchange settlement still use the US dollar.

From debt resilience to financial resilience

The five factors above show that ASEAN has a number of buffers that can strengthen the region's financial resilience, however, this does not mean resilience without limits. The resilience and strength of the ASEAN region today lie in the combination of a large domestic market, economic growth, foreign exchange reserves in several member countries, the development of local-currency bond markets, and an increasingly strong financial system, particularly one based on LCT.

Nevertheless, the increase in global debt should serve as an alarm for ASEAN to change its debt management paradigm, no longer pursuing a low debt ratio but moving toward debt risk management, while also shifting the paradigm from debt resilience toward financial resilience.