Dont: Use paper currency, not gold dinar

KUALA LUMPUR: Islamic countries should continue to use paper currency instead of gold dinar, said professor of comparative economic history at International Centre for Education in Islamic Finance Dr Murat Cizakca.

History had shown that the return to coinage system could increase interest rates and inflation would be difficult to control, he said.

Speaking at a public lecture on Islamic Gold Dinar: Myths and Reality organised by Association of Chartered Islamic Finance Professionals and Inceif yesterday, he said money should serve as a medium of exchange, not as a commodity.

“We need to continue with paper currency, and the central banks controlling paper currency should have full autonomy,” he said.

He added that gold supply was dominated by non-Islamic countries.

“The gold dinar will be exposed to speculation as the gold price also has its ups and downs. Islamic countries should continue to use paper currency and increase trade among each other,” he said. - Bernama

Prof. Dr. Murat Çizakça
Professor of Islamic Finance at INCEIF
Member of PDP(Senate), Kuala Lumpur, Malaysia

Prof. Murat Cizakca received his B.A degree in economics from the University of Leicester in England (1968) and M.A. and PhD degrees also in economics from the University of Pennsylvania in the U.S.A (1978). His main specialisation is economic history and he is known for his application of the principles of economic history to Islamic business and finance.

Dinar not for trading

Wednesday November 10, 2010

IPOH: The gold dinar and silver dirham currency to be introduced by the Perak state government is not meant to be used for trading but only for investment purposes, said Menteri Besar Datuk Seri Dr Zambry Abdul Kadir.

"The plan to introduce the dinar and dirham was made because many people prefer to keep the currency as they feel the value will increase.

"That is the basis of introducing the dinar and dirham," he told reporters after chairing the state exco meeting here yesterday.

He added that Perak would have no problem cooperating with Kelantan, which was attempting to use the gold dinar and silver dirham in all its transactions, including for paying civil servants' salaries.

Dr Zambry was commenting on news report that the Kelantan government was keen to cooperate with Perak to popularise the use of the dinar and dirham.

Kelantan economic planning, finance and welfare committee chairman Datuk Husam Musa was reported to have made the offer after Perak announced its plan to introduce the currency.

Dr Zambry said the gold dinar and silver dirham should not be used as a medium of transaction as it could cause problems to the country's economic system.

Moreover, he added, the Federal Government had set a medium of exchange in the country, that was through monetary currency rather than through gold or silver.

Meanwhile, in KOTA BARU, Hussam said Kelantan may pay half of the salaries of its state assemblymen in gold dinar and silver dirham.

He told the state assembly yesterday that the proposal would be forwarded to the state Treasury for its and the state government's consideration.

However, he added that the proposed payment in dinar and dirham would only be made to assemblymen who chose the new mode.

Those who disagreed would continue to be paid their full salary in Malaysian ringgit, he said in a supplementary question from Arifa­billah Ibrahim (PAS - Dabong).