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Gold Dinar System In International Trade

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In my opinion on the gold dinar system in international trade, the gold dinar system is actually a good option in order to stabilise our currency as well as in the international trade. When our former prime minister, Tun Dr. Mahathir Mohamad had expressed the idea to use the gold dinar for international trade during the financial crisis, it is the chance for Malaysia and other country to grow big. Gold can be volatile but it has an intrinsic value rather than fiat money.
Speculation and manipulation could be avoided with the use of gold and thus make the international trade would be protected from being subvert. The gold dinar system is fit to be use nowadays as we have unbalance currency compared to when we use the fiat money. I am not opposed …show more content…

Mahathir Mohamad decided to peg the Malaysia Ringgit (MYR) with the US Dollar (USD) at an exchange rate of RM3.8 for a US Dollar, Malaysia is still trying to improve the economy at that time. This makes our former prime minister to think out of the box by trying to implement the usage of gold dinar system as a standard unit of currency for trade and financial transaction.
The usage of gold dinar system also can escalate the purchasing power in the country. As we know gold also have their own drawback as it fluctuates in cost yet not as fiat money. But we have to know that gold is incompatible to use for daily exchanges in the local market. Gold can serve as a country’s reserve as it does have its own value. We generally cannot clarify the amount of money of a country 's reserve by their own currency.
We can help some countries that cannot have gold dinars because of poverty by buying their raw materials to be paid in gold dinars. This can helped them to boost the reserves of gold dinar. Gold will never become underrated things as it is a precious metal and the quantity is not so limited that anybody can manipulate the price. One gold dinar will not have any different in terms of value with gold dinar in another country. The value of a currency will not affect the value of gold dinar no matter which country involved in the …show more content…

The gold dinar is solely for global exchange, not to be utilized as local currency. Traders especially will be happy because the gold dinar prices would not be influenced by changes in exchange rates of importing or exporting countries.
Obviously the gold dinar can be a trading currency not specifically for Muslim countries but for all countries. But Muslim nations are in the best position to show the reasonability of the framework. They are in a position to deal with their economies objectively and in the process demonstrate the world that they are equipped for developing with soundness and in peace.
The gold dinar system should be implement as more countries should join hands to make a joint effort towards establishing the gold dinar mechanism. These will make the other countries to see the effectiveness of the gold dinar system and thus makes all countries to try to use the gold dinar for their international trade. The central depository are like a clearing house to balance the deficit and surpluses for the trading

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