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Indonesia reluctant to revive Asian Monetary Fund idea
The government has doubts about Malaysia’s suggestion to create an Asian Monetary Fund as a way to help countries in the region reduce their reliance on US dollars.
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Coordinating Economic Minister Airlangga Hartarto speaks to The Jakarta Post during an exclusive interview in his office on April 6. (JP/Vincent Fabian Thomas)
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ndonesia has responded cautiously to the idea of creating an Asian Monetary Fund as a way to reduce the region’s reliance on the United States dollar.
Recent talks between China and Malaysia have revived the decades-old proposal for such an institution, which would perform functions similar to the International Monetary Fund, but with a focus on the Asian region.
Coordinating Economic Minister Airlangga Hartarto told The Jakarta Post on Thursday that, in general, the idea was good for the region, but realizing it would require commitments from countries that may be hard to come by.
“First, there have to be countries committed to funding it. So, we can’t just talk about [forming] the institution directly,” Airlangga said during an interview in his office.
“Even the existing institution, the IMF, has many challenges,” he added.
US dollars have become a tool for Western countries to attempt to cripple Russia’s economy as part of sanctions imposed on the country following its invasion of Ukraine.
Countries that rely heavily on US dollars in their foreign trade have also suffered under the currency’s volatility, as the dollar tends to appreciate during times of global economic uncertainty, which makes the purchase of foreign goods priced in US dollars more costly in local currency terms, leading to what economists refer to as imported inflation.
