Malaysia and Russia have held talks about using their own currencies — the ringgit and the ruble — for bilateral trade. The discussions, confirmed by officials from both sides, signal a growing push to bypass the US dollar in international transactions.
What the talks covered
The conversations focused on settling trade payments directly in ringgit and ruble. Currently, most cross-border commerce between the two countries is denominated in dollars, requiring conversion fees and exposure to exchange-rate swings. Shifting to local currencies could cut those costs and reduce reliance on the US financial system.
Neither government announced a timeline or specific volume targets. The discussions are exploratory, with technical teams expected to work out the mechanics of currency swaps and settlement infrastructure.
A broader shift toward local-currency trade could chip away at the US dollar's dominance. The dollar is still the world's primary reserve currency, but countries from China to Brazil have been striking bilateral deals in their own money. If Malaysia and Russia follow through, it adds pressure on a system that has underpinned global trade for decades.
Analysts have long warned that de-dollarization could accelerate, especially as sanctions and geopolitical tensions push nations to seek alternatives. The ruble-ringgit discussions fit that pattern, though the actual volume of trade between the two countries is modest compared to their overall external commerce.
Potential realignments
Any move away from the dollar does more than just save on exchange costs. It can reshape alliances. Countries that trade in local currencies become less exposed to US monetary policy and less vulnerable to financial sanctions. That makes the dollar-based system less central, and opens room for new economic blocs.
Malaysia, a major exporter of palm oil, electronics, and natural gas, has been diversifying its trade partners. Russia, under heavy Western sanctions since its invasion of Ukraine, has been aggressively seeking non-dollar channels for its oil, gas, and grain exports. A direct ringgit-ruble route could serve both agendas.
The question now is whether the talks translate into action. Both central banks would need to set up currency swap lines and agree on exchange-rate mechanisms. No such agreements have been announced yet.
