The use of local currencies in ASEAN trade reforms has great potential to completely change the financial structure of member countries.
Malaysia should lead this transformation by adopting progressive fiscal and monetary policies, investing in financial digitalization and continuously strengthening regional economic diplomacy.
President of the Malaysian Economic Movement (GEM), Dr Armin Baniaz Pahamin stated that the step needs to be initiated to build a more stable financial system, although it will take time and the development of a strong financial infrastructure.
Armin stated that this proposal can create regional stability by strengthening the domestic capital market to increase liquidity and make the financial system more resilient.
He also stressed that Malaysia needs to establish an ASEAN Local Currency Clearinghouse (ALCC) in Kuala Lumpur to facilitate cross-border transactions in the ringgit currency without relying on the US dollar.
He also discussed the need to sign bilateral agreements in the ringgit with ASEAN countries such as Thailand, the Philippines and Indonesia as an initial effort to use local currencies in trade.
