KUALA LUMPUR: The decision on which country will helm the Asian Monetary Fund (AMF) will be based on the agreement among the 68 Asian countries involved, said Deputy Finance Minister I Datuk Seri Ahmad Maslan.
He said the AMF formation is currently still at the proposal stage and is viewed as an important move to strengthen the regional financial situation and be an platform to assist crisis-hit countries.
“I attended the Asian Development Bank (ADB) meeting in Incheon, South Korea, in May to understand the ADB’s role and the difficulties and challenges in setting up the AMF,” he said in a question-and-answer session in the Dewan Negara today.
He was replying to a question from Senator Datuk Mohd Hisamudin Yahaya who wanted to know whether Malaysia would become the host country for AMF administration.
Mohd Hisamudin also wanted to know the direction of international trade and investment using bilateral currencies to replace the US dollar as the dominant currency for trade.
Ahmad said Malaysia has practised cooperation among countries in the region through Asean+3 (Asean, China, Japan and South Korea), and among its initiatives is the Chiang Mai Initiative Multilateralisation (CMIM), a regional currency swap arrangement among participating members.
Malaysia has also implemented the Local Currency Settlement Framework (LCSF) with Indonesia and Thailand, he noted.
This framework facilitates the use of local currencies by the countries for bilateral trade and investment transactions.
According to him, through this cooperation, trade settlements using the Chinese yuan, Thai baht and Indonesian rupiah account for 16 per cent, 16.1 per cent and 16.6 per cent of total trade settlements, respectively.
He said that in November 2022, Asean central bank governors, through the Declaration on Advancing Regional Payment Connectivity and Promoting Local Currency Transaction, agreed to promote the use of local currencies for economic and financial transactions among Asean member countries.
“This is among the initial measures to reduce the dependency on US dollar and increase further regional financial stability.
“Countries in the region will continue to increase the efficiency and effectiveness of the mechanism from time to time to ensure continued economic and financial stability in the region,” he added. – BERNAMA
