The idea of establishing an Asian Monetary Fund has caught the attention of the Chinese leadership, a Malaysian government leader has revealed. The prime minister believes that there is no reason for his country, which is suffering from a strong dollar, to remain dependent on the greenback.
Malaysia prepares trade with China in its own currency, limiting its dependence on the dollar
China is open to discussing with Malaysia its decades-old proposal to establish an Asian Monetary Fund that could reduce its dependence on the U.S. currency, Malaysian Prime Minister Anwar Ibrahim announced (as quoted by Bloomberg).
Anwar, who also serves as Malaysia’s finance minister, proposed the idea at theBoao Forumlast week, stressing the need to reduce dependence on the International Monetary Fund (IMF) as well. On Tuesday, he told Malaysian lawmakers:
When he met with President Xi Jinping, he immediately welcomed the discussion, saying, ‘I will refer to Anwar’s proposal on the Asian Monetary Fund.’
The head of the Malaysian government was reporting on the results of his recent official visit to the People’s Republic. He said that the Malaysian central bank is already working to enable both countries to begin trading in their respective national currencies, the ringgit and the renminbi.
The strong dollar has weakened the region’s currency, creating a headache for countries like Malaysia, a net importer of foodstuffs, the report noted. Last fall, the ringgit and other currencies hit multi-decade lows against the greenback.
Anwar Ibrahim recalled that when he first became finance minister in the 1990s, he proposed the establishment of the Asian Monetary Fund. He admitted that the idea did not get enough support at the time because the U.S. dollar was seen as strong, and at the same time noted:
But now that economies like China and Japan are getting stronger, I think we should discuss this. At the very least, we should consider the Asian Monetary Fund, and secondly, the use of our respective currencies.
Anwar’s remarks came after finance ministers and central bank governors from the Association of Southeast Asian Nations (ASEAN), of which Malaysia is a member, discussed reducing dependence on Western currencies such as the dollar At a meeting in Indonesia at the end of March, they discussed ways to promote the use of their currencies in trade settlement ways to promote the use of their own currencies in trade settlements were also discussed.
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