Businesses in key export industries such as palm oil, petroleum and electrical and electronics are hesitant to support the de-dollarisation push. Read more at straitstimes.com.
KUALA LUMPUR - Malaysia’s proposal to reduce its dependency on the US dollar for trade is unlikely to gain traction among businesses in the country, say analysts, with key industries viewing the greenback as less volatile compared with alternative currencies.in end-March, echoes similar calls made by a growing number of countries including China, Russia and India.
India, a major importer of Malaysia’s palm oil, conducted US$19.4 billion worth of trade with Malaysia in 2022. “Hypothetically, it would be possible that Malaysia could see a reduction in US dollar-dominated trade by up to 20 per cent, if trade invoicing and settlement trades move to local or non-US dollar,” he told The Straits Times.
“The company also does not have any bilateral agreements with other countries to trade palm oil in different currencies,” the company told ST. Mr Tahir Bukhary, an investor in the oil and gas industry, said businesses would prefer to trade crude oil in the greenback until the Organisation of Petroleum Exporting Countries and its allies decide to sell crude oil in alternative currencies.US dollar slides to 1-year low as cooling inflation raises expectation of Fed pause
Malaysia’s palm oil businesses exposed to Indian rupee-ringgit exchange rate, which is likely to be more volatile than the US dollar, could lead to foreign exchange losses, impacting the revenue of the company, said CGS-CIMB Research regional head of plantations research Ivy Ng.
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