The Association of Southeast Asian Nations (ASEAN) countries are looking to promote local currencies for trade and ditch the U.S. dollar for cross-border transactions. ASEAN consists of 10 countries and their economies are fast developing in the global sphere. This puts the USD under pressure, as several developing countries including the ASEAN bloc are looking to end reliance on the U.S. dollar.
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ASEAN: 10 Countries Look To Stop Using the U.S. Dollar, Settle Trade Payments in Local Currencies Instead
The 10 ASEAN countries that are looking to stop using the U.S. dollar for trade are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. According to the latest figures from the International Monetary Fund (IMF), commonly called the World Bank, the combined GDP of ASEAN nations currently stands at around $4 trillion.
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If the ASEAN alliance completely starts using local currencies for trade, the U.S. dollar will be in jeopardy. In particular, Indonesia is the most aggressive among the lot in pushing the de-dollarization agenda ahead. Indonesian President Joko Widodo is urging the bloc to quickly move away from the U.S. dollar and start using local currencies.
The move will strengthen their native economies giving local currencies a boost in the global foreign exchange markets. Several developing countries fear the rising U.S. debt of $34.4 trillion can affect their native economies and businesses. Therefore, the only solution to American debt is to make ASEAN countries use local currencies and sideline the U.S. dollar.
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The U.S. pressing sanctions on other developing countries is also among the reasons why ASEAN wants to ditch the dollar. A stronger local currency will have no adverse effects from U.S. sanctions making their economies safer. In conclusion, the next decade will be different for the U.S. dollar as many nations are looking to uproot it.
