Gold Dinar Case Study

785 Words4 Pages
Gold is said to be a viable solution especially regarding to the issue of fiat monetary systems, problems and the nature that would undermine the stability of flexible exchange rates. The other possible solutions proposed in the literature including monetary union because in fact gold dinar is a form of monetary union (Khaw, 2000). One example is regarding to the reliance on the dollar that has created significant risks such as the Asian financial crisis. One possible solution could be to reduce exchange rate risks and enhance regional economic and financial stability is to identify the currency. Gold is used in the payment system based on gold as a unit of account and become a medium of exchange in the currency reserves of the country or internationally in order to assist in resolving the international trade balance. Weights of gold will quote the price of import and export. It is important because the price of gold itself is used and not merely national currency backed by gold. If the opposite happens, it will not show the differences from the gold standard in the past. Instruments backed by gold are easily abused leading to the failure of the gold standard. Islamic Law verified Dinar with a specific…show more content…
The gold prices showed stability when looking at the intrinsic value as a medium of exchange. People aware of it thus have demands the usage of Gold Dinar applied in domestic trade. After government of Malaysia evaluates the impact of having Gold Dinar as a medium of exchange for domestic use, they preferred that it is more appropriate to use Gold Dinar as an international medium of exchange. It is because Gold Dinar can be promoted in OIC countries. Other than that, Gold Dinar also will be a platform for uniting OIC countries becoming European countries. It happened when Euro currency have been used after using Gold Dinar as an international trade (Mohd Dali at el,
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