Malaysia to expand local currency use through BRICS cooperation

Malaysia is planning to expand the use of local currencies in cross-border trade and investment transactions through BRICS cooperation, according to the Finance Ministry. This move aims to reduce transaction costs, foreign exchange risks, and enhance financial resilience against external shocks. By increasing the use of local currencies, Malaysia hopes to improve the efficiency of foreign exchange exposure management and support the development of regional foreign exchange markets, providing businesses with more options for conducting international transactions.

The ministry also highlighted that Malaysia has already implemented various initiatives with major trading partners, including cooperation with China to facilitate the use of the renminbi and ringgit in bilateral trade, as well as the Local Currency Transaction Framework (LCTF) with Indonesia and Thailand. The ministry emphasized that while the use of major currencies in international trade and finance remains driven by structural factors, efforts to expand the use of local currencies must be market-driven, supported by efficient cross-border payment infrastructure and continuous cooperation between countries.

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