Local currency trade with China rising, but dollar still key, says PM

KUALA LUMPUR: Malaysia and China have increased the use of their local currencies in bilateral trade, with transactions in the yuan and ringgit rising from about 5% to 18% of total trade, says Prime Minister Anwar Ibrahim.

However, Anwar said this should not be seen as an attempt to abandon the US dollar in Malaysian trade.

“This is not necessarily de-dollarisation. The US dollar is still key in terms of financial transactions,” he said at the launch of Ant International’s Global Development Centre at Tun Razak Exchange today.

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

The finance ministry previously said Malaysia’s local currency trade and investment settlements with China, Thailand, and Indonesia had grown significantly over the past 16 years.

Anwar said Malaysia’s cooperation with China was not just between governments but also involved policies aimed at benefiting both countries and their people, including in finance, technology, and digital development.

The prime minister said Ant International’s decision to establish its global development centre in Kuala Lumpur was significant as other companies had only set up regional bases in Malaysia.

Ant International is a global digital payment, digitisation, and financial technology provider based in Singapore whose services include cross-border payments, merchant solutions, SME digitalisation tools, and financial services technology.

The Kuala Lumpur centre is meant to develop technology and commercial solutions from Malaysia for global markets while creating high-value jobs and building local talent.

Anwar said the launch reflected confidence in Malaysia’s stability and clarity in the government’s policies.

With Putrajaya in the midst of completing an AI Governance Bill, Anwar said he wanted Ant International’s input to ensure the proposed law reflects the latest regulatory practices.

“We want to make sure that we are up in the state of the art because the bill will complement existing frameworks, including the Cybersecurity Act and our data protection regulation,” he said.

He said digital trust would be central to Malaysia’s development as a digital nation, especially as AI reshapes commerce, credit assessment, risk management, and cross-border markets.