Malaysia is set to increase settlements in local currencies to reduce reliance on the US dollar, Prime Minister Anwar Ibrahim said on Tuesday.
“To entirely stop the reliance on the US dollar will be difficult, but Malaysia will be more active and aggressive in the use of ringgit (in trade),” Anwar told the parliament.
The process of de-dollarization is gaining momentum in Southeast Asia. The Malaysian prime minister noted that his country now has agreements with Indonesia, Thailand, and China, its largest trading partner, to encourage more trade and investment in local currencies.
The move comes amid a sharp decline in the Malaysian currency against the dollar. The ringgit is trading near historical lows and has lost about 7.6% of its value against the greenback this year.
Numerous economists in Southeast Asia highlight the increasing adoption of national currencies in international trade, which diminishes the special status of the US dollar. Experts argue that the dollar and the financial institutions tied to it have become obsolete and the greenback's role as primary international currency should be critically reviewed.
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