China Open to Talks on Establishing Asian Monetary Fund to Reduce Dollar Reliance – Bitcoin News

The Chinese leadership has shown interest in a decades old proposal to create an Asian Monetary Fund to lower reliance on the U.S. dollar, as revealed by the Malaysian Prime Minister. The nation’s central bank is already working on allowing the two countries to conduct transactions in their respective national currencies.

Talks Open With China to Create Asian Monetary Fund, Cut Dollar Dependence

Chinese officials are open to discussing the idea of an Asian Monetary Fund, Malaysian Prime Minister Anwar Ibrahim declared, quoted by Bloomberg. The PM revealed the information during his report to lawmakers on the results of his recent visit to the People’s Republic.

Anwar Ibrahim first proposed the initiative to create an Asian Monetary Fund in the 1990s when he assumed the position of Malaysia’s finance minister. At the time, the idea failed to take off as the U.S. dollar was perceived to be strong, he noted. He said:

But now with the strength of the economies in China, Japan and others, I think we should discuss this — at least consider an Asian Monetary Fund, and, secondly, the use of our respective currencies.

The expensive U.S. dollar is one of the root causes of the current problems the region is experiencing, as it has been weakening the value of the local currencies. The Malaysian ringgit, among others, hit multi-decade lows against the greenback last fall.

The Malaysian central bank is already working on allowing the two countries to trade in their respective national fiats, the ringgit and the renminbi, Anwar Ibrahim said. Moreover, the finance ministers and central bank governors of the Association of Southeast Asian Nations (ASEAN), of which Malaysia is a member, discussed reducing reliance on western currencies like the dollar during a meeting in Indonesia at the end of March. They are also looking into ways to promote the usage of regional currencies in trade settlements.

Do you think an Asian Monetary Fund will be formed in the near future? Share your opinions in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.