Dr M: Let’s have gold based currencies

Dr M: Let’s have gold based currencies

TOKYO: Malaysia is proposing a new currency based on gold as it is more stable as opposed to the present currency trading which is manipulative, said Prime Minister Tun Dr Mahathir Mohamad .

He said that gold can evaluate trading activities among East Asian countries.

“We can make settlement using that (new) currency (using gold). That currency must relate to the local currency as to the exchange rate and that is something that can be related to the performance of that country.

“That way we know how much we owe, how much we have to pay in the special currency of East Asia,” he said during a dialogue session at the 25th International Conference on The Future of Asia (Nikkei Conference) here, today.

Mahathir arrived in Tokyo last night for a three-day working visit.

Prime minister said the new currency could also be extended to the rest of the country, outside the East Asian region.

He noted that currently the global market is tied to the US dollar, opening the currency to be manipulated.

“Just because that one country is affected, there is infection to the other countries. Malaysia was very stable way back in 1997 … but because of the problem occurred in Thailand (during the Asian financial crisis), they said we must peg the Malaysian currency also.

“What happened? The currency traders sold the Malaysian currency down and the value of Malaysian currency depreciated.

“It is not even the money that they have, they never had any Malaysian currency but nevertheless they were able to sell huge quantities of Malaysian currency and when it is depressed then, of course, they can buy and sell it at a higher price when it comes up,” he explained.