Malaysia says will be more ‘aggressive’ in ditching dollar

Malaysia says it will move away from the dollar by adopting appropriate policies to expand the use of local currency ringgit in international trade.

Prime Minister Anwar Ibrahim said on Tuesday, “To entirely stop the reliance on the US dollar will be difficult, but Malaysia will be more active and aggressive in the use of ringgit (in trade).”

The veteran politician was addressing lawmakers in parliament.

The prime minister said Malaysia had reached agreements with Indonesia, Thailand, and China, its largest trading partner, to encourage more trade and investment in local currencies.

The push for trade in local currencies comes amid a sharp decline in the Malaysian currency against the dollar. The ringgit has plunged to record low rates against the greenback.

The end of US dollar hegemony draws near

The days of US dollar hegemony appear to be numbered as multiple countries have adopted alternative currencies to the US dollar for international transactions.

Many economists believe the shift to national currencies in international trade is diminishing the special status of the US dollar.

De-dollarization advocates maintain the dollar and the financial institutions tied to it have become obsolete and should no longer play the role as the primary source for transaction in international financial markets.

The group of BRICS countries is also looking to shift away from the US dollar as members are exploring the possibility of creating a common currency for trade.

The use of alternative currencies will help reduce currency risk for businesses and encourage greater economic integration between countries.

President Vladimir Putin of Russia has criticized US leaders for taking advantage of the dollar’s influence to enforce hegemonic policies.

Speaking at the 2021 economic forum in St. Petersburg, Putin said Moscow would settle future oil and gas transactions using other local currencies.

Putin said Washington was openly engaged in efforts to create obstacles in Russia’s progress by using the dollar as a tool for competition.

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