PM’s Asian Monetary Fund idea meant to aid trade with China, says Tengku Zafrul as he downplays fallout with US

KUALA LUMPUR, April 6 — Prime Minister Datuk Seri Anwar Ibrahim had proposed the Asian Monetary Fund to help firms adopt a different currency when trading with China in a bid to mitigate the effects of a strong dollar, Minister of International Trade and Industry Datuk Seri Tengku Zafrul Abdul Aziz reportedly said.

The minister told American broadcaster CNBC suggested that the disadvantage caused by a strengthening dollar may have prompted the idea, which Anwar had first touted in the 1990s as then finance minister.

“This is an idea which has been talked about since the 1990s. And I recently as well, at a conference three years ago, talked about the strength of the US dollar, and how its monetary policy has impacted countries like Malaysia, where we obviously have to deal with the changes that are made in the United States,” the minister told CNBC’s Squawk Box talk show.

A transcript of the interview was made available to Malay Mail.

“Having said that, the yuan has continued its dominance. In terms of currencies traded today... now it’s number five, about 7 per cent of market share.

“But the US, obviously, is still the most traded currency, followed by euro, pound sterling, as well as yen. So I think what he’s talking about is about having an alternative for companies, especially for companies that are trading with China,” he added.

Anwar told Parliament on Tuesday that China is open to talks on forming an Asian alternative to the International Monetary Fund amid the world’s growing impatience with the dominance of the US dollar.

The prime minister said he proposed setting up the fund at the Boao forum in Hainan last week, stressing the need to reduce reliance on the dollar.

Tengku Zafrul also commented on the recent influx of investments from China following Anwar’s official visit there.

After Malaysia attracted RM170 billion of potential foreign direct investment (FDI) from China and could have RM2.44 billion in potential exports to China, Tengku Zafrul downplayed the potential of this causing a stir in Putrajaya’s relationship with Washington DC.

“I don’t think so. And I think what we are seeing is that Malaysia continues to be a destination where we are able to provide the right ecosystem for investors... for companies, especially in US and China, they’re looking at Malaysia not only because of the incentives given but because of the major industries that have been in Malaysia for quite a while,” he reportedly said.

Tengku Zafrul led the Miti mission to China from March 31 to April 2 where he met with five potential Chinese investors in Beijing.

Anwar also paid a courtesy call to China’s President Xi Jinping during his three-day visit here to deepen the strategic bilateral political and trade relationship with China.

Anwar is among the first foreign leaders to visit China and met with Xi after his reelection as China’s President for the third term on March 10.