KUALA LUMPUR – Efforts towards de-dollarisation are necessary to ensure the country becomes more independent and freer of its dependency on the US dollar, said Prime Minister Datuk Seri Anwar Ibrahim.
Speaking in the Dewan Rakyat, he said Malaysia currently has the most successful local currency transaction with China at roughly RM39.2 billion, equivalent to about 25% of the total trade volume.
As such, Anwar, who is also the finance minister, underscored the importance of being more aggressive in calling on other countries against being dependent on the US currency.
“Among the efforts in de-dollarisation, as with China, is a good thing. If 25% of the trade value with China is in ringgit and renminbi, then the same amount is not dependent on decisions made by the US.
“If we use the dollar, whatever happens in the US, in terms of interest rate increases, will have adverse negative effects on our country.
“If we branch out by about 30% to 40% with each country, then the effect reduces,” Anwar said during the question-and-answer session today.
He was responding to a supplementary question by M. Kulasegaran (Ipoh Barat-PH), who asked about the benefits of de-dollarisation.
Anwar said any decisions made by the US are to bolster its economy, resulting in international financial systems and any understanding derived from international negotiations taking a back seat.
“The US prioritises strengthening its economy, though the effects are unfair for developing countries. This is the distortion of the international financial infrastructure system,” he said.
Earlier, Datuk Seri Noraini Ahmad (Parit Sulong-BN) asked about the recent strategies regarding the approach of de-dollarisation to encourage trade between nations using the ringgit and how far the initiative was welcomed by regional countries.
Besides China, Anwar said Malaysia has local currency transactions of RM10.7 billion (16.7%) with Indonesia and another RM8.2 billion (19.6%) with Thailand.
He added that Vietnam and Cambodia have recently shown their interest and support for the Local Currency Settlement Framework, which was sealed at the recent Asean Summit in Jakarta. – October 17, 2023