KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim said Vietnam and Cambodia have shown interest in using their local currency for trading purposes as a step to reduce dependence on the US dollar.
“Malaysia is aggressively reducing its dependence on the US dollar, and so far we have received a good response.
“In fact, we have just signed an agreement at the ASEAN Summit this year, and the two countries have recognised the Local Currency Settlement Framework (LCSF) agreement that was signed recently,” said Anwar, who is also the Minister of Finance during the Minister’s Question Time session in the Dewan Rakyat.
He said Vietnam’s Prime Minister, Pham Minh Chinh had also ordered the negotiation on the use of the local currency for trade matters to be expedited.
Vietnam is Malaysia’s 10th biggest trading partner.
He said this in reply to a question from Datuk Seri Dr Noraini Ahmad (BN-Parit Sulong) regarding the latest plan on the approach to reducing dependence on the US dollar to encourage trade between countries using the ringgit currency, and to what extent the initiative is welcomed by regional countries.
Anwar added that some of the country’s main trading partners such as Singapore — the country’s main trading partner in ASEAN — have not shown interest in using local currencies for trading purposes.
“The US dollar is still strong in major trades, so countries choose to use it.
“I saw no interest (from) Japan, Hong Kong, and South Korea, (while) India still imposes rupee restrictions abroad except for citizens, so negotiations may take time,” he added.
Nonetheless, he believes that ASEAN and China’s success in using local currency can encourage other countries to join in, taking advantage of the solution amid stronger sentiments towards the US dollar.
The prime minister also welcomed the proposal to use the dinar to strengthen trade and economy with the countries involved.
“As the global halal industry market expands to more than US$1 trillion, Muslim countries are already aware of the need (to use) the dinar, but since the 90s, there has been no serious response as yet.
“This is one of the topics that will be discussed during the meeting on Islamic economics and finance in Kuala Lumpur in December,” he said. – Bernama
