VIETNAM and Cambodia have shown interest in trading in their own currencies to reduce dependency on the US dollar, Prime Minister Anwar Ibrahim told parliament today.

“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 agreement that was signed recently,” said Anwar, who is also the finance minister.

He said Vietnam’s Prime Minister Pham Minh Chinh had ordered negotiations to sped up over the use of the dong for trading.

Vietnam is Malaysia’s 10th biggest trading partner.

Anwar said this in reply to a question from Noraini Ahmad (Parit Sulong-BN) on the plan to encourage regional trade using the ringgit and to what extent the initiative is welcomed by regional countries.

Anwar added that some of Malaysia’s main trading partners, such as Singapore, have not shown the same interest.
“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 said Asean and China’s success in trading in local currencies could encourage other countries to join in.

The prime minister also welcomed the proposal to use the dinar to strengthen trade with the Middle East countries.

“As the global halal industry market expands to more than US$1 (RM4.7) 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 in the meeting on Islamic economics and finance in Kuala Lumpur in December.” – Bernama, October 17, 2023.