Tengku Zafrul said the probability of BRICS member countries replacing the US dollar was “almost nonexistent” as the majority of global trade relies heavily on the greenback.

He cited Malaysia’s trade with China, which accounts for about 18% of Malaysia’s total trade, and where the majority of transactions are carried out in the US dollar.

“There are some (companies) that have agreed that if they export and import from Malaysia, they will receive ringgit, and we will receive renminbi. But to my knowledge, this is still small and involves settlements rather than a full de-dollarisation.

“At the same time, investors who have invested outside the US, when they export to the US, they use the dollar,” he told the Dewan Rakyat today.

He was replying to Ku Abd Rahman Ku Ismail (PN-Kubang Pasu) who asked about Malaysia’s stand on the de-dollarisation after US president Donald Trump threatened to impose a 100% tariff on BRICS countries.

In October 2023, Prime Minister Anwar Ibrahim said Malaysia was looking to increase trading in the local currency to shore up the weakening ringgit and reduce reliance on the US dollar.

On Trump’s threat of tariffs on BRICS nations, Tengku Zafrul noted that Malaysia was not a full member of the grouping, only a partner country.

He added that Malaysia is taking proactive measures to maintain and enhance its bilateral trade and investment with the US to avoid potential tariff hikes by Trump’s administration.

He said the US remains one of Malaysia’s largest investors, with over 600 American firms operating in the country.

“We are taking proactive steps to prevent tariff hikes as seen imposed on China, Canada, and Mexico,” he said, while expressing confidence that existing US investors would continue to expand their operations in Malaysia.