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Jun. 4 – Malaysia and China may consider doing trade in Chinese yuan and Malaysian ringgit, said the Malaysia’s prime minister during a press briefing.
“We can consider whether we can use local currencies to facilitate trade financing between our two countries,” Malaysian Prime Minister Najib Abdul Razak told press after a meeting with China’s premier, Wen Jiabao.
“What worries us is that the [U.S.] deficit is being financed by printing more money,” Mr. Najib added. “That is what is happening. The Treasury in the United States is printing more notes.”
China has suggested that the U.S. dollar be replaced as the global currency with a more stable basket of currencies. It has already been trying pilot programs in selected Chinese cities that uses the yuan for trade settlements.
Brazil is also considering reducing risks of the dollar by doing trade with China in yuan. Realistically speaking though, it will still take years before the Chinese yuan is used as a global benchmark because the currency is still blocked outside the country where it is difficult to buy and sell.
Mr. Najib was in Beijing for a four-day visit to coincide with the 35th anniversary of diplomatic ties. Both countries signed framework agreements meant to further ease trade and investment.
