The Leaders of the Association of Southeast Asian Nations (ASEAN) have agreed to “encourage the use of local currencies for economic and financial transactions”. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. This will allow them to reduce their reliance upon the U.S. dollar.
At the 42nd ASEAN Summit held in Labuan Bajo, Indonesia, an official declaration was released by the chairman at the end of the summit. The declaration stated that the leaders commit to “encouraging the use of local currency for economic and financial transactions among ASEAN member countries to deepen regional integration and promote currency market development in local currency in order to strengthen financial stability within the region.”
In September, the ASEAN finance ministers and central bankers met in Bali, Indonesia, and agreed on steps to increase the use of local currency in the region. Bank Indonesia Governor Perry Warjiyo stated that Indonesia is following the BRICS’ de-dollarization lead. The BRICS nations (Brazil, Russia, India, China, South Africa) are working on a common currency to reduce their reliance on the U.S. dollar, and their leaders plan to discuss this topic at their upcoming leaders’ summit.
A former White House economist warned that if BRICS nations use only their common currencies for international trade, “they would remove an impediment that now thwarts their efforts to escape dollar hegemony.” Investment analyst Jon Wolfenbarger added that the U.S. dollar could lose its status as a reserve currency if the BRICS currency is successful. This would lower the standard of living in America and reduce the power of the U.S. government.
Are there any countries that are pushing for the use of their local currency in place of U.S. Dollars? Let us know in the comments.
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