|Malaysia, Iran discuss the use of gold
KUALA LUMPUR -
Kuala Lumpur is discussing with Iran the
possibility of having "bilateral payment arrangements"
to enable Malaysia to use the gold dinar to settle
Malaysian Deputy Finance Minister Dr Shafie
Mohd Salleh said it was still in the early stage of
discussion. "Various issues would have to be taken into
consideration, including the current diplomatic and
bilateral relations between Malaysia and Iran," he said.
He said Malaysia is also discussing the matter
with a number of countries from West Asia as well as
Bahrain and Egypt that may want the same arrangement.
However, he said it was also still at the
early stage of discussion as "there are a number of
countries in West Asia which use the US dollar when
Shafie said the
Iranian government is interested in Malaysia's suggestion
of using the gold dinar as another way of settling trade
He said top officials from Iran
had expressed their intention to use the dinar in their
business transactions with Malaysia under the bilateral
Prime Minister Mahathir Mohamad was quoted as saying
recently that Malaysia planned to set up a secretariat to
promote the idea of using the gold dinar by central
banks of other Muslim countries.
big supporter of the subject of reviving the gold
dinar, believes that this would help in containing
the dominance of the World Bank and the
International Monetary Fund (IMF) in economic and financial affairs
of the Muslim world. "We do not care about the dictates
of the IMF, as we are an independent and sovereign
nation," Mahathir had said proudly, adding that the Muslim
world possessed plenty of wealth that was not being invested
in productive trade and economic activities.
The country was proposing the gold dinar to
strengthen especially the weak economies of certain
Islamic countries, on the pattern of the euro,
Mahathir emphasized, arguing that if Europe can take care
of its countries, "why can't we follow the same
The gold dinar had been the currency
of the Muslim world until the collapse of the Ottoman
Empire in 1924. Being the single currency at that time,
the dinar helped in uniting Muslims in trade and, as a
result, trade flourished.
pegged its currency to the US dollar in 1997 after
the onset of the Asian financial crisis, has confirmed
that the ringgit will continue to be pegged to the dollar.
"For Malaysia, 85 percent of trade settlement and 77
percent of foreign debts are made in the US dollar," Shafie
He made the statement
as many parties wanted the government to consider changing
the peg to other currencies such as the euro because of the softer US