ASEAN economic integration boosts regional financial independence
KUALA LUMPUR: Greater economic integration within ASEAN is driving efforts to establish an independent regional financial system, reducing dependency on external currencies and improving monetary stability, according to a Malaysian analyst.
Lee Pei May, a political expert at the International Islamic University Malaysia, highlighted in an interview with Xinhua that these measures aim to mitigate financial volatility rather than target any specific country. The shift toward local currencies for intra-ASEAN trade will streamline cross-border transactions, expand market access for micro, small, and medium enterprises (MSMEs), and boost regional tourism.
'The push for the use of local currencies has been ongoing for some time, as it helps strengthen the economic integration of ASEAN member states -- an important goal that ASEAN seeks to pursue,' Lee explained. She noted that other regions are also reducing reliance on dominant foreign currencies like the US dollar due to external interest rate fluctuations and policy shifts that can destabilize exchange rates.
Cross-border payments in local currencies offer faster, cheaper transactions while shielding businesses from external volatility. Lee emphasized the tourism sector as a key beneficiary, as travelers within ASEAN will no longer face the inconvenience of currency exchange.
The Regional Payment Connectivity (RPC) initiative, initially involving Malaysia, Thailand, Singapore, Indonesia, and the Philippines, has expanded to include Vietnam, Laos, Brunei, and Cambodia. 'The participation would bring about seamless cross-border transactions and boost tourism in the region,' Lee stated.
Growing awareness of risks tied to US dollar dependency has accelerated ASEAN's push for financial resilience. 'In the past, certain currencies were viewed as stable, but due to increasingly unpredictable global developments, this perception is shifting,' Lee added. She warned that economic tools used to pressure policy differences could have adverse effects, reinforcing the need for regional financial safeguards.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malaysia Sun
19 minutes ago
- Malaysia Sun
Economic Watch: ASEAN integration drives development of independent regional financial system, analyst says
KUALA LUMPUR, June 28 (Xinhua) -- Greater economic integration among the members of the Association of Southeast Asian Nations (ASEAN) is accelerating efforts to build an independent and resilient regional financial system, aimed at reducing reliance on external currencies and enhancing monetary stability across Southeast Asia, according to a Malaysian analyst. These moves are not meant to target any specific country but rather reflect a desire to move away from external financial volatility and facilitate transactions using local currencies for intra-ASEAN trade, which will enable seamless cross-border transactions, provide greater market access for micro, small and medium enterprises (MSMEs), and also boost regional tourism, Lee Pei May, a political expert at the International Islamic University Malaysia, said in a recent interview with Xinhua. "The push for the use of local currencies has been ongoing for some time, as it helps strengthen the economic integration of ASEAN member states -- an important goal that ASEAN seeks to pursue. In fact, other regions are also moving away from relying too heavily on a single foreign currency, such as the U.S. dollar, as external interest rates and shifting government policies may cause significant volatility in currency exchange," she explained, adding that volatility is undesirable in any business. "Apart from the benefits of easier and faster transactions between businesses and banks of ASEAN countries through the use of local currencies, cross-border payments in local currencies can also help to avoid the volatility from outside the area," she said. Lee also said that allowing cross-border settlements in local currencies would be faster and cheaper, and singled out the tourism sector as a big winner, as tourists in the region will not need to go through the hassle of changing physical money when visiting other ASEAN states. "The Regional Payment Connectivity (RPC) initiative was first established to strengthen payment connectivity among the five ASEAN members, notably Malaysia, Thailand, Singapore, Indonesia and the Philippines. To date, the initiative has expanded to include central banks of Vietnam, Laos, Brunei and Cambodia," she said. "The participation would bring about seamless cross-border transactions and boost tourism in the region. Under the local currency settlement framework, many national payment systems have been linked, such as between Malaysia and Indonesia," she said. Lee also noted that the ASEAN push for local currencies and reduced dependency on external monetary systems has gained momentum amid growing awareness of the risks posed by relying on the U.S. dollar. "In the past, certain currencies were viewed as stable, but due to increasingly unpredictable global developments, this perception is shifting," Lee said, adding that if economic tools were to be used to exert pressure on policy differences, it could have negative implications. "Such risks, even if unlikely, remind us why building regional financial resilience is critical," she said.
The Star
an hour ago
- The Star
China-Laos Railway sees over 10 billion yuan in trade value from Jan-May
KUNMING (Xinhua): The China-Laos Railway handled more than 2.48 million tonnes of import and export cargo valued at over 10 billion yuan (US$1.4 billion) from January to May this year, customs data has showed . Both freight volume and value saw significant growth in this period, with a 7.9-per cent year-on-year increase in volume and a 33.2-per cent surge in value. In May alone, this railway transported 512,000 tonnes of goods worth 3.76 billion yuan -- setting a monthly record high since its opening in December 2021. Following its launch, the railway has experienced robust growth in cargo transport. As of May 22, total freight volume had surpassed 60 million tonnes, with cross-border shipments exceeding 13.9 million tonnes. The range of goods transported has expanded dramatically from just over 10 types initially to more than 3,000. These goods include electronics, photovoltaic products, communication equipment, automobiles, agricultural products, industrial goods and daily necessities. - Xinhua
The Star
an hour ago
- The Star
Myanmar marks MSME Day with focus on digitalisation
YANGON (Xinhua): Myanmar commemorated Micro, Small, and Medium Enterprises (MSME) Day with a formal ceremony in the capital Nay Pyi Taw on Friday, state media daily The Mirror reported Saturday. Speaking at the event, Deputy Prime Minister and Union Minister for Planning and Finance U Win Shein said that MSMEs are the backbone of the global economy and play a vital role in poverty reduction and achieving long-term sustainable development, the report said. He said that over 90 percent of businesses are under the MSME category, generating between 60 percent and 70 percent of employment opportunities, it said. He also highlighted the necessity for MSMEs to embrace digital systems to survive and thrive in today's rapidly evolving economic landscape, saying that digitalisation enhances operational efficiency, expands access to domestic and international markets, improves customer service, and boosts competitiveness, the report said. Afterward, attendees viewed a video presentation and toured an MSME product exhibition featuring goods from Nay Pyi Taw Union Territory at the event, the report said. Senior government officials, including ministers and deputy ministers of related ministries, attended the event. - Xinhua
