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HomeMalaysia NewsPM Anwar Initiates Ringgit-Based Trade Agreements with Indonesia, Thailand, and China

PM Anwar Initiates Ringgit-Based Trade Agreements with Indonesia, Thailand, and China

Prime Minister Datuk Seri Anwar Ibrahim announced today that Malaysia has extended invitations to countries including Indonesia, Thailand, and China to utilize the Malaysian ringgit for bilateral trade. He revealed this development during a session in the Dewan Rakyat, highlighting that this initiative emerged from discussions held with China and the recent ASEAN Summit in Jakarta, Indonesia.

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“China has warmly embraced this proposal,” stated Anwar. “Approximately 20 to 28 percent of significant investments, amounting to billions in ringgit, are being conducted in our currency. This shift does not negatively impact the ringgit in terms of losses or depreciation. Thus far, we have successfully promoted the use of the local currency in Indonesia, Thailand, and China.”

His remarks were in response to a query by Pendang MP Datuk Awang Hashim from the Perikatan Nasional coalition concerning the government’s efforts to address the ringgit’s depreciation, which had reached RM4.73 against the US dollar.

Additionally, Anwar acknowledged that the ringgit had depreciated by 6.5 percent against the US dollar, but he stressed that this decline was less severe than that experienced by other currencies, such as the Japanese yen and Thailand’s baht. Anwar also noted that South Korea’s situation was comparable, but Indonesia had managed its currency more effectively, as emphasized in the previous parliamentary session, by reducing subsidies.

He further highlighted that the concept of trading in local currencies was not new and had been integrated into the international financial system following the late 1990s economic crisis. In September, he reiterated this point, underlining that trading in local currencies had become a standard practice.

This morning, the ringgit started on a positive note against the US dollar, benefiting from a weaker greenback due to dovish comments from senior US Federal Reserve officials regarding the interest rate outlook. At 9 am, the ringgit had strengthened to 4.72 against the US dollar, an improvement from the previous day’s close at 4.73. In May, Bank Negara Malaysia had explained that the ringgit’s significant depreciation against the US dollar was consistent with the broader decline of regional currencies against the greenback.