Last updated on April 13th, 2023 at 10:39 am
Malaysia and China are exploring the possibility of advancing talks about establishing an Asian Monetary Fund as reducing dependence on the US dollar gains more importance in the region.
The proposal, introduced last week during the Boao Forum held in the Chinese island province of Hainan, emphasizes the importance of decreasing dependence on the US dollar and the International Monetary Fund (IMF).
1. Following the global shift away from the US dollar, Prime Minister Anwar Ibrahim is in talks with China on forming an Asian Monetary Fund.
“There is no reason for Malaysia to continue depending on the dollar,” he told Parliament on Tuesday. pic.twitter.com/nyF1wmGPgX
— The Futurizts (@TheFuturizts) April 4, 2023
According to reports, the Malaysian Prime Minister, Anwar Ibrahim, stated that China was receptive to the idea of establishing an Asian Monetary Fund. Ibrahim further revealed that during his meeting with President Xi Jinping of China, the Chinese leader welcomed discussions about the creation of an agency that would assist both China and other nations in the region to become less reliant on the US dollar and the IMF.
Ibrahim stated:
“When I had a meeting with President Xi Jinping, he immediately said, ‘I refer to Anwar’s proposal on the Asian Monetary Fund’, and he welcomed discussions.”
Ibrahim, speaking to the Malaysian parliament, stated that “there is no reason for Malaysia to rely on the dollar” and added that the central bank of Malaysia is currently collaborating with the People’s Bank of China to facilitate trade negotiations in their respective currencies, the ringgit and renminbi. This move is part of Malaysia’s effort to reduce its dependence on the US dollar, which is also being pursued by other Asian countries.
The proposed Asian Monetary Fund is not a new idea. In the 1990s, Ibrahim suggested creating the fund during his first term as Malaysia’s finance minister. However, his proposal did not gain momentum at the time because the US dollar was still perceived as dominant.
But with the strength of the economies in China, Japan, and other countries, Ibrahim believes that they should, at the very least, deliberate on establishing an Asian Monetary Fund and contemplate using their currencies.
In a related development, on March 31, Alexander Babakov, the Deputy Chairman of the State Duma in Russia, called for the BRICS coalition to collaborate and develop a new currency that would benefit its members and reduce the US dollar’s dominant impact on global trade. Babakov made the statement during the St. Petersburg International Economic Forum event in New Delhi, India.
The proposal to create an Asian Monetary Fund and the call for the BRICS coalition to collaborate on a new currency reflect the growing sentiment in the region that reducing dependence on the US dollar and the IMF is becoming increasingly important. As these discussions gain traction, it remains to be seen what impact they will have on global trade and finance.
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