Malaysia makes ‘aggressive’ ringgit push for China trading to slash reliance on US dollar

‘To stop the reliance on the US dollar is difficult, but Malaysia will be more active and aggressive in the use of ringgit’, PM Anwar Ibrahim said

He told parliament on Tuesday that part of this strategy will involve increased use of the Malaysian currency with largest trading partner China

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A money changer holds out Malaysian ringgit banknotes above stacks of US$100 bills at a foreign-exchange counter in Kuala Lumpur. Photo: AFP

Published: 1:31pm, 10 Oct 2023

Prime Minister Anwar Ibrahim said on Tuesday that Malaysia wants more trading partners to accept payment in ringgit, as part of a strategy to shore up the currency and reduce reliance on the US dollar.

Anwar said Malaysia had agreements with Indonesia, Thailand and China, its largest trading partner, to encourage more trade and investment in local currencies.

“We want to increase the use of local currency in trading with China … or de-dollarisation. To stop the reliance on the US dollar is difficult, but Malaysia will be more active and aggressive in the use of ringgit,” Anwar told parliament.

Malaysian Prime Minister Anwar Ibrahim said on Tuesday that the ringgit’s decline was largely due to external developments such as rising US interest rates. Photo: Bloomberg

Anwar was replying to questions from a lawmaker on what was being done about costs rising as a result of the ringgit’s decline against the US dollar.

The ringgit is trading near historical lows and has lost about 7.5 per cent of its value against the dollar this year.

Anwar said the ringgit’s decline was largely due to external developments such as rising US interest rates.

Malaysia would implement structural reforms that can attract investments and boost the economy, which would bolster the local currency, he added.

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