Malaysia Pursuing De Dollarisation Trading In Ringgit Pm

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PARLIAMENT | The government, through Bank Negara Malaysia, is exploring initiatives to encourage countries to trade in local currencies, said Prime Minister Anwar Ibrahim.
This is in line with his view for Malaysia to reduce its reliance on the US dollar in trade and investments.
Anwar said Malaysia has held several negotiations with China, Indonesia and Thailand and has begun using local currencies in its transactions.
“We succeeded in using local currencies with Indonesia, Thailand and China. However, not all (countries) are involved in commodity and international trade. That is why I suggest de-dollarisation,” he told the Dewan Rakyat today.
Anwar was responding to Awang Hashim (PN-Pendang) who asked for the government’s action in dealing with the ringgit’s decline against the US dollar.
PM Anwar IbrahimThe premier reiterated that the value of the ringgit had no connection with the fundamentals such as good economic growth, good investment, falling inflation or falling unemployment rates, but was influenced by the United States Federal Reserve which raised interest rates.
US dollar dependency
Wee Ka Siong (BN-Ayer Hitam) later raised that de-dollarisation comes with many challenges as countries are highly dependent on the US dollar.
The former transport minister asked if large corporations would have savings in ringgit to increase demand for the Malaysian currency.
Anwar responded that some government-linked investment companies (GLICs) and local private corporations have begun to trade in local currencies.
“If (US) dollar is used exclusively, surely the ringgit is at stake. But there are many companies that attempt to use (US) dollar and have savings in ringgit for the transactions to be in ringgit,” he said.
In an effort to reduce Malaysia’s reliance on the US dollar, Anwar previously proposed for Asian countries to establish the region's own version of the International Monetary Fund (IMF).
Financial experts previously suggested having an Asian Monetary Fund (AMF) would provide Asian countries with a better alternative during crises.
- Mkini

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