Earlier, the US put Malaysia, along with several other states such as China, on a watch list, alleging that the country was manipulating its currency to gain an advantage over the dollar.
Malaysian Prime Minister Mahathir Mohamad has called on East Asian nations to create a new international currency, which he offered to use in regional interstate trade, and to leave currency manipulation in the past. The existing currencies would be converted into a new one, based on each country’s economic performance and would not be used for internal trade, according to the prime minister’s suggestion, which was made during a speech at the “The Future of Asia” international conference.
“If we want to unite in the East, we need to start with creating a single ‘trading currency.’ Not a currency that would be used internally, but a currency for trade”, he said.
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What is more, Mohamad believes the new currency should be based on gold, as it is a “much more stable” asset than anything else. At the same time, he slammed the existing dollar hegemony in international trade, calling for change.
“You [The US] are not democratic. That is not for any single power to decide. If you want to live in a united world, a stable world, we must resort to sustainability through agreement between all nations that have a stake in that problem”, he said.
Washington recently added Malaysia to a special watch list of countries suspected of “manipulating currencies” in an attempt to allegedly gain an advantage over the dollar. Malaysia responded to the move by pointing out that its currency is traded in a floating exchange rate and hence is not regulated by the government.
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Malaysia is not the first country to raise the issue of the dollar’s hegemony in trade and as an international reserve currency. For instance, Russia has long been promoting the idea of conducting bilateral trade deals in national currencies and has struck agreements with several countries to solidify the approach. Russian Foreign Minister Sergei Lavrov accused the US of abusing the dollar’s status in April 2019 and warned that “everyone understands how unreliable it is”.