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Wednesday, June 19, 2024

Malaysian Currency Now On RV Path in BRICS Gold-Backed Alliance, 19 JUNE

Malaysian Currency Now On RV Path in BRICS Gold-Backed Alliance

Prime Minister Declares Strategic Intention to Join BRICS Alliance which would lead to a significant RV of the Malaysian Ringgit (MYR).


In This Article

  • Malaysia’s Formal Bid to Join BRICS
  • The Anticipated Revaluation of the Malaysian Ringgit
  • BRICS Gold-Backed Trade Currency and Its Implications
  • Malaysia’s Strong Economic Contributions to BRICS

Malaysia’s strategic decision to join the BRICS economic bloc has sparked significant discussions regarding the future of the Malaysian Ringgit (MYR).

Prime Minister Anwar Ibrahim’s announcement highlights Malaysia’s intent to align with BRICS, potentially leading to the revaluation (RV) of the Ringgit through the bloc’s gold-backed common trade currency which will be composed of 40% gold-backing.


Malaysia’s Formal Bid to Join BRICS


Prime Minister Anwar Ibrahim’s recent declaration signifies a pivotal moment for Malaysia’s economic and diplomatic strategy. In an interview with Chinese news outlet Guancha, aired ahead of Chinese Premier Li Qiang’s visit, Anwar confirmed Malaysia’s intention to join BRICS, marking a crucial step towards diversifying its strategic relationships.


“We have indicated, as a policy, that we are joining,” said Datuk Seri Anwar. “We have made a decision. We are placing the formal procedures soon.” This move aligns Malaysia with a group of nations collectively challenging the Western-dominated global order, potentially reshaping the economic landscape.


The Anticipated Revaluation of the Malaysian Ringgit


One of the most significant implications of Malaysia joining BRICS is the potential revaluation of the Malaysian Ringgit.

The BRICS bloc plans to implement a gold-backed common trade currency. Inclusion of the Ringgit in this currency basket could significantly enhance its purchasing power and exchange rate, especially against fiat currencies like the US Dollar.

The revaluation of the MYR would not only strengthen Malaysia’s financial stability but also boost its attractiveness for foreign investments. This economic shift is expected to elevate Malaysia’s status in the global market, offering new opportunities for growth and development.


BRICS Gold-Backed Trade Currency and Its Implications


The BRICS bloc’s move towards a gold-backed trade currency is a strategic effort to reduce dependency on the US Dollar and foster economic sovereignty among member nations. For Malaysia, participating in this initiative means aligning the Ringgit with a stable and valuable currency system, enhancing its global economic influence .

This new currency system aims to facilitate smoother and more secure trade among BRICS nations, providing a robust alternative to the existing fiat currency system.

The anticipated revaluation of the Ringgit under this gold-backed regime is poised to offer Malaysia greater economic leverage and improved terms of trade.


Malaysia’s Strong Economic Contributions to BRICS


Malaysia’s decision to join BRICS is underpinned by its strong economic indicators and potential contributions to the bloc.

In 2024, Malaysia’s GDP is estimated to reach $445 billion USD, with substantial exports in key sectors such as digital/electronic devices, electrical machinery, mineral fuels, and industrial machinery. These economic strengths position Malaysia as a valuable member of the BRICS alliance.


Malaysia’s top export destinations in 2023 included major economies such as Singapore, China, and the USA, highlighting its significant role in global trade.

The nation’s diverse export portfolio, comprising electrical machinery, mineral oils, and animal or vegetable fats, among others, showcases its capacity to contribute effectively to a diverse BRICS economic bloc.


Experts, such as Datuk Prof Dr. Mohd Faiz Abdullah of Malaysia’s Institute of Strategic and International Studies (ISIS), emphasize the importance of Malaysia’s participation in BRICS. “Building our ties with these key countries will make our economy more resilient,” he noted, underscoring the strategic benefits of Malaysia’s move.


The Bottom Line


Malaysia’s formal intention to join BRICS represents a strategic maneuver with far-reaching economic implications.


The potential revaluation of the Malaysian Ringgit, driven by the adoption of a BRICS gold-backed common trade currency, positions Malaysia for enhanced financial stability and global economic influence.


Coupled with Malaysia’s robust economic contributions, this move promises to solidify the nation’s standing within the BRICS alliance, fostering new opportunities for growth and collaboration in the evolving global landscape.


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