KUALA LUMPUR, Oct 17 — Prime Minister Datuk Seri Anwar Ibrahim said Vietnam and Cambodia have shown interest in using their local currency for trading purposes to reduce dependence on the US dollar.
“Malaysia is aggressively reducing its dependence on the US dollar, and we have received a good response so far.
“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,” he said during the Minister’s Question Time session in the Dewan Rakyat today.
Vietnam’s Prime Minister, Pham Minh Chinh, has also ordered the negotiation on using local currency for trade matters to be expedited. The country is Malaysia’s 10th biggest trading partner.
He was responding to Parit Sulong Datuk Seri Noraini Ahmad regarding the latest plan on reducing dependence on the US dollar to encourage trade between countries using the ringgit currency and to what extent regional countries welcome the initiative.
Anwar added that some of Malaysia’s main trading partners, like Singapore — the country’s main trading partner in Asean — have yet to show 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, Anwar believes 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 (RM4.73 trillion), Muslim countries are already aware of the need (to use) the dinar, but since the 1990s, 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
