Recently, the Malaysian government plans to reconsider the concept of using the gold dinar as a reserve currency. This was disclosed by Prime Minister Datuk Seri Anwar Ibrahim, who expressed his intention to debate the discourse on the Islamic Economic and Financial Summit scheduled for December.
According to him, the plan to make use of the gold dinar is to begin on a limited scale. According to the Prime Minister, thus far, Malaysia’s trade with China has used ringgit and renminbi at a ratio of about 25 percent.
In a matter and answer session, Datuk Seri Anwar Ibrahim stressed that the introduction of the gold dinar may very well be a positive first step towards achieving a five-six percent increase in trade with Islamic countries. He stressed that such a move would contribute to greater economic stability and reduced dependence on the US dollar, which might ultimately provide greater financial strength.
Previously, former Prime Minister Tun Dr Mahathir Mohamad had promoted the thought of using the gold dinar as a global reserve currency for Muslim countries as an alternative choice to the sometimes volatile US dollar. However, the proposal was met with mixed reactions from economists. Some economists argue that Saudi Arabia is probably not excited about the thought, while others prefer a “multilateral currency” as a method of reducing dependence on the USD.
Regardless, Anwar stressed that adopting the gold dinar may very well be an alternate approach that may, in turn, strengthen each country’s domestic economic resilience. He also explained that the usage of the gold dinar will not be an alien concept to Islamic countries. Moreover, with the halal industry growing to over $1 trillion, the dinar has grow to be a priority for a lot of other countries outside the Islamic world.
Therefore, the usage of local currencies in trade is well accepted, especially by countries corresponding to China, Indonesia and Thailand.
Source: Times of recent straits | Free Malaysia today
