According to Prime Minister Datuk Seri Anwar Ibrahim, there is no need for Malaysia to depend on the US dollar to attract investments.
He believes that negotiations between Malaysia and other countries should involve the use of both countries’ currencies, The Star reported.
Malaysia and China to not depend on the US dollar and use ringgit and yuan for trade
Prime Minister Ibrahim stated that Malaysia’s central bank Bank Negar is working on an initiative that would enable Kuala Lumpur and China to conduct trade using the ringgit and yuan.
Anwar proposed the establishment of an “Asian Monetary Fund” during the Boao Forum in China last week. And President Xi Jinping welcomed the idea for further discussion.
“A more important matter is about the Asian Monetary Fund and the initial stage that I had proposed as the Finance Minister which was not well received in Asia because at that time the US dollar was very strong,” he said.
According to Anwar, China plans to invest about RM170.07 billion (US$38.64 billion) in Malaysia, with investments in the petrochemical and automotive industries.
Specifically, Rongsheng Petrochemical will invest approximately RM80 billion in a petrochemical refinery located in southern Malaysia, according to Anwar’s announcement in parliament.
Strong US dollar a challenge for Asian nations
When M Kulasegaran (PH-Ipoh Barat) asked whether the government plans to join the majority of countries that no longer use the US dollar for trade transactions, the Prime Minister responded: “But now with the economic strength of China, Japan and so on, I think this proposal should be negotiated at least about the Asian Monetary Fund and can utilise the ringgit and the country’s currency accordingly.”
The Prime Minister’s remarks come a few months after Singaporean officials discussed ways for regional economies to deal with the risk posed by the still-strong US dollar, which has weakened local currencies and been used as a tool of economic statecraft.
The strength of the dollar has been a challenge for many Asian countries, including Malaysia, which is a net importer of food products. In September 2022, the Bloomberg dollar index reached a new high, causing the ringgit and other currencies in Southeast Asia to fall to multi-decade lows.
