The ASEAN bloc is now actively working on ways to move away from the US dollar. This development entails ASEAN nations collectively curating their own currency system, which is set to rival the US dollar’s growing prestige.
However, as easy as it sounds, with the USD’s reputation as a global reserve currency, it might be harder for the bloc to embrace a new currency without encountering certain negative implications.
Thailand, an export-based economy, has relied on the US dollar for holistic trade. If the bloc ditches the dollar, the nation can suffer international severe trade and commerce complications.
Also Read: ASEAN: Malaysia Advances De-Dollarization Agenda
Ditching the US Dollar: Is That a Good Idea?
Thailand had expressed its desire to reduce its dependence on the US dollar. To explain it further, the nation reiterated how it expects to reduce its reliance on USD, mainly in intra-regional trade payments. At the same time, the news of the ASEAN bloc working in sync to formulate their currency system caught pace, which gave rise to speculations of the bloc ditching the dollar for good.
Potential Complications for Thailand
Thailand, in particular, may suffer severe complications if it ditches the dollar in the long haul. For instance, the Thai baht’s value could be jeopardized, derailing its value below the average threshold.
If the Thai currency weakens, it could make the nation’s exports more competitive. Similarly, with the Thai economy weakening, the development could affect the foreign investment metrics, with the nation encountering declining foreign investments in the region.
Moreover, the development above can also affect Thailand’s reputation on a global level. As most nations transact in US dollars, Thailand can be left alone to fend for itself, creating trade rifts and barriers between other countries.
Also Read: Cryptocurrency: Top 3 Coins to Stash in August for Major Gains
ASEAN’s Stance on the US Dollar: Why Is the Greenback Being Ditched?
ASEAN nations are now vying for a local currency agenda. The bloc is now promoting a multipolar currency narrative that entails promoting one’s local currency to transact global deals. ASEAN is reportedly working on a unified currency system that intends to derail the US dollar and simultaneously wishes to establish its international prestige.
ASEAN Concerns About the US Dollar
The bloc has also expressed concerns about the US dollar and its constant weaponization on a global level.
The alarming surge in US debt also sabotages the US dollar’s position as a leading world currency.
This development also compels nations to source compliant alternatives to protect themselves from a potential economic meltdown.
Also Read: Ripple (XRP) & Dogecoin (Doge) Price Prediction For September 2024