Indonesian Migrant Remittances from Kuala Lumpur Face High Transfer Costs

Indonesian migrant workers sent approximately Rp288 trillion in remittances in 2025, marking a 14 percent increase from the previous year. These funds are transferred from locations like Kuala Lumpur to provinces such as East Java. Despite the volume, the global average cost for sending US$200 remains 6.36 percent, which is more than double the 3 percent Sustainable Development Goal target.

Remittances are often the largest single source of income for receiving households across developing Asia. The reliance on costly correspondent banking means that a significant portion of the money, potentially US$13 on a US$200 transfer over a year, is lost to fees. This has spurred central banks to expand digital payment rails and local currency settlement to reduce dollar dependence.

Indonesia and Malaysia are currently working closely on cross-border issues and cooperation.