Malaysia’s Mahathir proposes common East Asia currency based on gold

Malaysia's Prime Minister Mahatir Mohamad proposes common East Asia currency pegged to gold as he calls the existing currency trading as 'manipulative'.

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South-Asian-currency
Malaysia’s Mahathir proposes common East Asia currency pegged to gold

 

Malaysian Prime Minister Mahathir Mohamad has yesterday mooted the idea of common trading currency for East Asia. Mahathir came up with a suggestion of common regional currency because he thinks the existing currency trading is ‘manipulative’.

He said the new regional currency will be pegged to gold. Malaysian PM proposed that the common currency could be used to settle imports and exports. However, it will not be used for domestic transactions.

“In the Far East, if you want to come together, we should start with a common trading currency, not to be used locally but for the purpose of the settling of trade”,he said at the Nikkei Future of Asia conference in Tokyo.

He suggested this because the new currency should be based on gold because gold is comparatively much more stable.

“The currency that we propose should be based on gold because gold is much more stable.”

He further said that in the current foreign exchange system, local currencies are impacted by external forces and hence are manipulated.

Also See: Dollar Rate Falls To 148.70 In The Inter-Bank And 149.50 In Open Market

Mahathir has been vocal with his criticism of currency trading. He even once famously accused billionaire George Soros of betting against Asian currencies. Mahathir pegged the ringgit currency at 3.8 to the dollar and imposed capital controls during the Asian financial crisis. That peg was scrapped in 2005.

As Reuters reports, the Trump administration said no major trading partner met the criteria required to be placed on the U.S. Treasury Department’s list of its currency manipulators. However, it named Malaysia among nine countries that required close scrutiny.

Responding to that, Malaysia’s central bank said that its intervention in currency markets was limited to managing excessive volatility only.

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