Malaysia wants to ditch the dollar, joining the quest for survival and stability in a world where the dollar isn’t as untouchable as it used to be. The BRICS started it, and now Malaysia is in the process of diversifying its currency exposure.
One of the big reasons the country is pushing away from the dollar is to keep its economy more stable. The dollar’s value can swing up and down, and when that happens, countries like Malaysia get hit hard.
By using a mix of currencies, Malaysia is looking to smooth out those wild swings. When the U.S. makes changes to its monetary policies, it affects the entire world. Malaysia doesn’t want to be in a position where every ripple turns into a wave that crashes their economy.
They’re also looking at cutting costs. Every time Malaysia does a trade deal in dollars, they’re paying extra because of conversion fees and other costs tied to using a foreign currency. By trading in local currencies, they’re trimming the fat.
They’ve already made decisions in this direction, like the deals they’ve struck with India, where both sides trade using their own currencies instead of dollars.
Then there’s the ringgit, Malaysia’s own currency. It’s taken a beating against the dollar, and that’s a problem. A weaker ringgit means everything the nation imports costs more, and it also makes it harder to pay off debts that are priced in dollars.
By stepping away from the dollar, Malaysia is trying to give the ringgit a little more breathing room. This is important for keeping their import costs manageable and making sure their dollar-denominated debts don’t become a noose around their neck.
There’s a political angle too. By leaving the dollar, Malaysia is telling America, “We want more control over our own money.” This is about taking back control and making sure their monetary policies aren’t overly influenced by what’s happening in Washington.
There’s also a bigger picture here—regional cooperation. Malaysia is pushing for something called the Asian Monetary Fund.
The idea is to make it easier for Asian countries to trade with each other using their own currencies instead of the dollar. This would strengthen ties between these countries and help them rely less on Washington financially.
