Recently, the Malaysian government is planning to revisit the concept of using the gold dinar as a reserve currency. This was revealed by Prime Minister Datuk Seri Anwar Ibrahim, who expressed his intention to discuss this discourse at an Islamic Economic and Financial Summit scheduled for December.
According to him, the plan to use the gold dinar is expected to start on a limited scale. Previously, Malaysia's trade with China has used ringgit and renminbi in the proportion of about 25 percent, as stated by the Prime Minister.
In the question and answer session, Datuk Seri Anwar Ibrahim emphasized that the introduction of the gold dinar could be a positive first step to achieve a five to six percent increase in trade with Islamic countries. He emphasized that this move would contribute to greater economic stability and reduced dependence on the US dollar, ultimately providing greater financial strength.
Previously, former Prime Minister Tun Dr. Mahathir Mohamad had promoted the idea of using the gold dinar as an international reserve currency for Muslim countries as an alternative to the sometimes volatile US dollar. However, the proposal has received mixed reactions from economists. Some economists argue that Saudi Arabia may not be interested in the idea, while others prefer a "multilateral currency" as a measure to reduce dependence on the USD.
Regardless, Anwar emphasized that the adoption of the gold dinar could be an alternative approach that in turn strengthens each country's domestic economic resilience. He also explained that the use of the gold dinar is not an alien concept to Islamic countries. Moreover, in the context of the growth of the halal industry to more than $1 trillion, the dinar has become a concern for many other countries outside the Islamic world.
Therefore, the use of local currencies in trade is well accepted, especially by countries such as China, Indonesia and Thailand.
Source: New Straits Times | Free Malaysia Today