Malaysia (Commonwealth Union)_ In recent years, several Asian nations have expressed a desire to distance themselves from the United States dollar and the International Monetary Fund (IMF), which have long dominated the international monetary system. Malaysia is one of these countries, and its central bank has partnered with the People’s Bank of China to facilitate transactions in both countries’ currencies.
Accordingly, Malaysian Prime Minister Anwar Ibrahim stated that China is willing to negotiate with Malaysia on the establishment of the Asian Monetary Fund (AMF) in order to reduce dollar dependence. The idea of such a fund was discussed at a meeting that was held in Hainan, China. According to Anwar’s latest statement at the Malaysian parliament, Chinese President Xi Jinping lauded the initiative during a meeting with the Malaysian prime minister during the latter’s state visit to China last week.
The PM also noted that a country like Malaysia has no reason to continuously depend on the US currency. Prime Minister Datuk Seri Anwar Ibrahim stated, “There is no reason for a country like Malaysia to continue relying on the US dollar in attracting investments into the country”. According to him, investment negotiations between Malaysia and other nations should use the currencies of the respective countries involved in the transactions.
At present, the Central Bank of Malaysia is facilitating trade negotiations between the two countries using the ringgit and renminbi. Anwar stated that he had suggested the idea earlier during his tenure as Deputy Finance Minister in the 1990s, but the concept failed to acquire traction in Asia due to the perception that the US dollar was extremely strong. However, with the current economic dominance of China, Japan, and others, it is the right time to discuss the concept.
Anwar again proposed the concept of establishing the AMF at the Boao Forum in Hainan, China, last week, emphasizing the need to reduce reliance on the US dollar and the International Monetary Fund. Economists assert that the creation of an Asian Monetary Fund (AMF) is now possible due to major reforms in global realities that have engendered optimism regarding an alternative non-US-led global financial order.
