Malaysia has proposed that the gold dinar be used as
a currency, for international trade. Prime Minister, Datuk Seri Dr.
Mahathir Mohamad, said Kuala Lumpur had already worked out the mechanics
for the usage of the dinar, which would greatly reduce the risk of speculation,
as well as expand world trade.
Datuk Seri Dr. Mahathir on Tuesday opened the International
Islamic Capital Market Conference in Kuala Lumpur. In his speech, he
proposed that the gold dinar be used for international trade to prevent
a repeat of the currency crisis in Asia a few years back.
"We have already worked out the mechanics for using
the gold dinar and any problem arising can be resolved. The risk of
speculation will be reduced to almost nothing. World trade can actually
expand because the cost of business will be much reduced as the need
to hedge would practically disappear.
He added that making dinar a currency for international
trade did not mean it would replace the currency of any country.
"The dinar can be held as central bank reserve. Trade
need not be paid in actual dinar but the imports and exports of a pair
of trading nations can be balanced and only the difference paid in dinar.
This will minimise the need to move the gold dinar. In fact the surplus
or deficit can be credited or debited against future imports or exports.
Datuk Seri Dr Mahathir, who is also Finance Minister,
explained that paper currency had no intrinsic value, making the exchange
rate arbitrary and subject to manipulation. In comparison, gold has
a definite value based on the demand for the metal. Also in his speech,
Datuk Seri Dr Mahathir said that islamic capital markets should introduce
indigenous financial products to remain competitive.
"If we are merely to confine our product development
efforts to evaluation and adaptation of products in conventional markets,
the islamic capital market will have to play a perpetual catch up game
with the conventional financial system.
Meanwhile, economic adviser to the Prime Minister, Tan
Sri Nor Mohamed Yakcop explained that the gold dinar would mainly be
used for trading with other nations, in the context of bilateral or
multilateral payment agreement.
"Use the gold dinar for trading with other country.
The domestic country of Saudi Arabia will still use riyal and Msia use
ringgit, But when we buy or sell export & import with each other, it
will be in gold dinar and that gold dinar also will not be settled for
each trade, It'll be settle after 3 or 6 months for the nett amount,
so the amount will be very small.
Tan Sri Nor Mohamed however said that the system was
still in the early stages of implementation.
http://www.tv3.com.my/news/nl/morenl3_26.html
GDRG Home
THE GOLD DINAR RESEARCH GROUP 