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| Malaysia switches to trading with major partners in local currency, instead of US dollar. (Source: iStock) |
The above information was announced by Malaysian Prime Minister Anwar Ibrahim before the country's Parliament on October 10.
De-dollarization is gaining momentum in Southeast Asia. Prime Minister Anwar noted that Malaysia currently has agreements with Indonesia, Thailand and China - its largest trading partner - to encourage more trade and investment in local currencies.
“I have had discussions with China and ASEAN countries on how we can use local currencies in trade,” the Malaysian Prime Minister said.
This has been well received by China and about 28% of the investment amounting to billions of dollars will not be in greenbacks but in Ringgit.”
The move comes amid a sharp decline in the Malaysian ringgit against the dollar. The currency is trading near a historic low and has lost about 7.6% of its value against the greenback this year.
On the decline of the ringgit against the US dollar, Mr Anwar informed that this issue has nothing to do with fundamentals but more to do with the US Federal Reserve's recent move to raise overnight interest rates.
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