Malaysian Prime Minister Anwar Ibrahim announced that Malaysia and India will promote the use of their national currencies—the ringgit and the rupee—for bilateral trade and investment. The move aims to reduce reliance on the U.S. dollar and strengthen economic ties between the two countries.
Speaking after talks with Indian Prime Minister Narendra Modi, Anwar said local currency settlements would lower foreign exchange costs, reduce currency risks, and make trade smoother. Malaysia and India currently record more than $19 billion in bilateral trade, covering sectors such as palm oil, electronics, textiles, and engineering goods.
The initiative is part of broader efforts to increase monetary independence and build more resilient economic partnerships. Bank Negara Malaysia and the Reserve Bank of India are expected to develop the necessary payment frameworks and banking arrangements to support ringgit-rupee transactions.
Business groups in both countries have welcomed the plan, noting it could especially benefit small and medium enterprises by cutting transaction costs and limiting exposure to exchange rate volatility. It may also open doors for deeper financial cooperation, including possible currency swap arrangements.
The move reflects a wider global trend where emerging economies are exploring local currency trade systems to diversify away from dollar-based settlements and strengthen regional and South-South economic cooperation.
