Enhancing the Local Community Economy through Financial Transactions: The Contribution of the Rupiah and the Kina

Nani Hanifah

Authors

Nani Hanifah IAIN Fattahul Muluk Papua, Indonesia

Keywords:

financial transactions, dual-currency system, local economy, border area, Rupiah and Kina

Abstract

This study aims to examine the contribution of the Indonesian Rupiah and the Papua New Guinean Kina in financial transactions and their role in enhancing the local economy in border communities. The research is grounded in the economic phenomenon observed in the Skouw Sae border area, where daily financial transactions are not solely dependent on the national currency but also involve a neighboring country’s currency as an adaptive response to cross-border economic dynamics. A descriptive qualitative approach with a field research design was employed. Data were collected through in-depth interviews, direct observation, and documentation involving local business actors, cross-border traders, and community members engaged in dual-currency transactions. The data were analyzed thematically to identify patterns, mechanisms, and economic implications of dual-currency usage. The findings reveal that the dual-currency financial transaction system contributes positively to transaction intensity, local money circulation, market accessibility, and community purchasing power. Rather than generating economic instability, the use of both currencies functions as an adaptive mechanism that strengthens local economic resilience. This study provides empirical and theoretical contributions to border economy literature and offers policy-relevant insights for designing context-sensitive and inclusive local economic development strategies.

References

L. Riso, G. Vacca, and M. Zoia, “Climate-induced geopolitical risk and financial interdependence in Europe: A systemic transition perspective,” Struct. Chang. Econ. Dyn., vol. 77, pp. 23–42, 2026, doi: 10.1016/j.strueco.2025.12.010.

J. Saadaoui, J. Beirne, D. Park, and G. S. Uddin, “Impact of climate vulnerability on fiscal risk: Do religious tensions and financial development matter?,” Energy Econ., vol. 155, 2026, doi: 10.1016/j.eneco.2026.109180.

Y. Huang, W. Liang, K. Duan, M. Parhi, and T. Mishra, “Sentiments and risks: A spillover tale under climate policy uncertainty,” Energy Econ., vol. 154, 2026, doi: 10.1016/j.eneco.2025.109101.

X. Liu et al., “Facilitating net-zero emissions goals through green finance: Enhancing efficiency in corporate green innovation within a two-stage value chain framework,” Int. J. Prod. Econ., vol. 292, 2026, doi: 10.1016/j.ijpe.2025.109832.

S. Fu, Y. Ge, G. Wang, J. Tian, J. Peng, and J. Xiao, “The impact of digital finance on trade credit: empirical evidence from the Yangtze River Economic Belt,” Econ. Chang. Restruct., vol. 59, no. 1, 2026, doi: 10.1007/s10644-025-09946-4.

L. Zhu and J. He, “Effects of multiple incentive policies on carbon information disclosure strategies of power battery: A complex network evolutionary game analysis,” Int. J. Prod. Econ., vol. 292, 2026, doi: 10.1016/j.ijpe.2026.109919.

A. Anand and A. R. Nair, “Delving into the nexus: financial stress and asymmetric monetary policy response,” Appl. Econ., vol. 58, no. 4, pp. 704–720, 2026, doi: 10.1080/00036846.2025.2456128.

R. Sun, Q. Shang, A. Zu, and S. Gan, “How does digital finance affect financing constraints of SMEs? Evidence from China,” Appl. Econ., vol. 58, no. 2, pp. 363–381, 2026, doi: 10.1080/00036846.2025.2453248.

P. Arora, D. Choo, and C. Hu, “Spatial consumption risk sharing,” Eur. Econ. Rev., vol. 180, 2025, doi: 10.1016/j.euroecorev.2025.105163.

P. Dua and D. Tuteja, “Decoding synchronization of cycles between BRICS and the U.S.: Patterns and drivers,” Econ. Model., vol. 155, 2026, doi: 10.1016/j.econmod.2025.107391.

R. Rahayu, R. Hidayah, V. Juita, R. Hidayah, and R. A. Putri, “Financial literacy and well-being among Generation Z: The mediating roles of digital literacy, capability, and impulsivity in Indonesia,” Invest. Manag. Financ. Innov., vol. 23, no. 1, pp. 51–66, 2026, doi: 10.21511/imfi.23(1).2026.05.

K. Dunbar and X. Gao, “Advancing climate technology in developing nations through energy transition investments,” Energy Econ., vol. 152, 2025, doi: 10.1016/j.eneco.2025.109027.

D. Grechyna and P. E. Ofori, “Robust determinants of green finance,” Energy Econ., vol. 152, 2025, doi: 10.1016/j.eneco.2025.109003.

H. Zhou, Z. Huang, and Y. Wang, “Utilizing LASSO-VAR and frequency decomposition to analyze the climate risk contagion network: Implementing decarbonization strategies in finance,” Energy Econ., vol. 152, 2025, doi: 10.1016/j.eneco.2025.108999.

I. Tambari, P. Failler, S. Shabbar A. Jaffry, and H. Yuan, “Could natural resources and financial development influence the markets for renewable energy in developing economies?,” Resour. Policy, vol. 108, 2025, doi: 10.1016/j.resourpol.2025.105691.

F. Qureshi, S. Qureshi, I. Ismail, and L. Yarovaya, “Unlocking economic insights: ESG integration, market dynamics and sustainable transitions,” Energy Econ., vol. 145, 2025, doi: 10.1016/j.eneco.2025.108407.

J. Zhang, X. Lei, T. Su, and Z. Li, “Credit availability of energy-intensive industries in emerging economies: Do financially established firms have better access to credit?,” Energy Econ., vol. 145, 2025, doi: 10.1016/j.eneco.2025.108433.

C. Fine, N. Yadav, and C. Murawski, “No Interest: The Marginalization of Women in Academic Finance,” Fem. Econ., vol. 31, no. 2, pp. 263–290, 2025, doi: 10.1080/13545701.2025.2483823.

S. Dsouza, K. Krishnamoorthy, U. Kayani, F. Kayani, and F. Hasan, “Sustainable investing: ESG effectiveness and market value in OECD regions,” Cogent Econ. Financ., vol. 13, no. 1, 2025, doi: 10.1080/23322039.2024.2445147.

Q. Wang, M. Chen, and T. Shao, “Strong financial regulation and enterprise digital innovation: promoting or inhibiting?,” Appl. Econ., vol. 57, no. 55, pp. 9410–9425, 2025, doi: 10.1080/00036846.2024.2418433.

Y. Miao, Y. Tian, J. Cao, and X. Yu, “Green finance and privatization of green projects in the fossil fuels industry,” Resour. Policy, vol. 103, 2025, doi: 10.1016/j.resourpol.2025.105547.

N. Babayev, G. Mammadova, S. Pürhani, T. Gurbanova, and S. Huseynova, “Comprehensive analysis of shadow economy countermeasures and taxation of hidden income in the agricultural sector of the Republic of Azerbaijan,” Sci. Horizons, vol. 28, no. 1, pp. 130–142, 2025, doi: 10.48077/scihor1.2025.130.

J. Zuo, “Impact of monetary policy on the stock market volatility: a GARCH-MIDAS approach in Malaysian economy,” Cogent Econ. Financ., vol. 13, no. 1, 2025, doi: 10.1080/23322039.2025.2459183.

J. Yang and K. Min, “Transforming ASEAN’s future: how clean energy and innovation can shape environmental progress,” Cogent Econ. Financ., vol. 13, no. 1, 2025, doi: 10.1080/23322039.2025.2450035.