ASEAN Leaders Push for Local Currency Transactions to Strengthen Financial Integration
In an exciting move, the leaders of 10 Southeast Asian nations belonging to the Association of Southeast Asian Nations (ASEAN) have embraced the idea of using local currencies for economic transactions. This gathering included Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam, all seeking to reduce their reliance on the U.S. dollar.
At the 42nd ASEAN Summit held in Labuan Bajo, Indonesia, the leaders discussed regional payment connectivity and promoting local currency transactions. The aim is to strengthen economic integration by enabling faster, seamless, and more affordable cross-border payments within the region.
In a joint declaration, they pledged to encourage the use of local currencies for financial transactions among ASEAN member states. This move not only deepens regional financial integration but also promotes the development of local currency markets, contributing to financial stability in the region.
This decision follows the ASEAN finance ministers and central bank governors’ meeting in March, where they agreed to take steps towards reinforcing the use of local currencies and reducing reliance on the U.S. dollar for cross-border trade and investment.
Notably, Indonesia’s Bank Governor Perry Warjiyo highlighted that Indonesia is following the de-dollarization path of the BRICS nations (Brazil, Russia, India, China, and South Africa). The BRICS countries are actively exploring the creation of a common currency to diminish their dependence on the U.S. dollar. If successful, this could challenge the dollar’s dominance and impact the global financial landscape.
Experts speculate that a successful BRICS currency could potentially undermine the U.S. dollar’s reserve currency status, leading to consequences for the U.S. economy and government. While it remains to be seen how this will unfold, the ASEAN leaders’ move towards local currencies marks an exciting shift in the region’s financial landscape.
Clever Robot News Desk 16th May 2023