China and Malaysia are considering relaunching discussions regarding the establishment of an “Asian Monetary Fund” that will help the two countries reduce their dependence on the dollar in trade, an objective increasingly perceived as a priority by the countries of the region.
Malaysian Prime Minister, Anwar Ibrahim, said he personally raised the issue last week during his visit to Beijing:
“During the meeting with President Xi Jinping, he immediately said ‘I refer to Anwar’s proposal on the Asian Monetary Fund’, and said he was willing to conduct discussions,” the prime minister said during a parliamentary hearing yesterday. Anwar, who has also assumed the role of foreign minister, said that “there is no reason for Malaysia to continue to depend on the dollar”.
The idea of an “Asian Monetary Fund” dates back to the late XNUMXs, but the Prime Minister of Malaysia has proposed relaunching it on the basis of the new global economic balance: “With the strengthening of the economies of China, Japan and others, I think we should discuss this issue, and consider at least an Asian Monetary Fund and secondly, the use of our respective currencies,” the prime minister said.
Finance ministers and central bank governors of Southeast Asian countries concluded a series of discussions on March 31 in Bali, Indonesia, focusing on the region’s resilience to global risks.
The meeting of financial leaders of the Association of Southeast Asian Nations (ASEAN) follows the recent crisis of two US banks and the bailout of Credit Suisse. The deputy governor of the central bank of Indonesia, Dody Budi Waluyo, declared that “the problems of us (countries) of ASEAN are the same: high inflation, financial market turmoil, capital outflow … Now we also observe the impact on the region of banking tensions in the United States and Europe”.
The participants in the meetings formulated a proposal to intensify the use of local currencies in regional trade and investment, so as to reduce the dependence on currencies such as the dollar and the euro. Dody said cryptocurrencies, central bank digital currencies and the integration of regional payment services were also discussed during the meetings, even though the infrastructure of some of the ASEAN countries is not yet fully developed.
Via Agenzianova News
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]