Malaysia to ‘seriously’ explore settling foreign trade in local currencies

KUALA LUMPUR: Malaysia will “seriously” explore the use of local currencies with its trading partners to mitigate volatile foreign exchange risks, says Prime Minister Anwar Ibrahim.

He said Malaysia is already trading significantly with China and Russia, while India has agreed to begin using its currency for trade or engage in barter arrangements.

Anwar, who is also finance minister, cited the success of such bilateral payment arrangements in local currencies, particularly with China.

He noted that trade in local currencies with China has expanded to about 22-23% of total bilateral trade, up from around 16% a few years ago.

“We are now starting to explore this very seriously in our bilateral negotiations with many countries.

“India has agreed finally to start either some form of barter … local currency usage is an option,” Anwar said today in an interview with Russian state-backed television news channel RT.

Anwar was asked about efforts to develop alternative payment systems outside Western-dominated financial mechanisms and whether Asean countries are pursuing similar approaches.

Malaysia has been actively expanding cross-border trade settlements in local currencies to reduce dependence on the US dollar and minimise exchange rate risks.

Significant progress has been led by Bank Negara Malaysia, including through bilateral frameworks with major partners such as China, Indonesia and Thailand, as well as recent discussions with Russia.

Anwar and Russian president Vladimir Putin also discussed the use of local currencies in bilateral trade during their meeting in Kazan, Russia, as part of efforts to strengthen economic ties.

Anwar is currently leading the Malaysian delegation to the Asean-Russia Commemorative Summit in Kazan, which concludes today.

Russia guarantees long-term petrol, oil and gas supplies to Malaysia

Anwar also said Russia has agreed to guarantee long-term supplies of petrol, oil and gas to Malaysia.

He said the agreement would provide certainty to Malaysians about the country’s energy supply without having to rely on agreements that are renewed every year or for a specific season.

“Instead, preparations will be made to establish a long-term agreement.

“Approval has already been granted, and company representatives have already come here. It is now a matter of signing and finalising the agreement,” he said.