Mahatir urges use of currencies other than U.S. dollar
Mahatir urges use of currencies other than U.S. dollar
Agence France-Presse, Kuala Lumpur
The U.S. dollar's dominance in global trade and transactions has distorted the world economy including that of the United States, Malaysian Prime Minister Mahathir Mohamad said Thursday.
"When you put too much value on a certain currency, it becomes very powerful and that currency works against us," Mahathir was quoted as saying by the Bernama news agency.
There should be an option to use either the dollar, euro, yen or even gold for these transactions to safeguard countries from the dangers of currency manipulation, he said.
"We keep reserves in U.S. dollars and that is of course to the benefit of the United States."
He added the U.S. always had a deficit even though "for 10 years it was growing at a tremendous rate".
During the same period, Japan, which made a lot of money, saved a lot of money and had huge reserves was said to be doing badly.
The contradictions were simply because "we are giving value to the U.S. dollar which it doesn't really have," he said.
Mahathir, who is also finance minister, said there was nothing to back the dollar other than the people's belief in the currency.
When the dollar had appreciated against Malaysia's ringgit during the 1997-1998 Asian financial crisis, Malaysia had suffered.
"So it is clear that if you use one currency alone to do all your business, you're exposing yourself to the dangers of manipulation. We don't want that to happen.
"We should work out a strategy so as to make use of other currencies."
Mahathir, whose country is a net oil exporter, said oil should not be quoted only in dollars.
"Today oil prices have gone up but the dollar has come down, something that the people don't point out," he said.
The veteran Malaysian premier, who blames "greedy" currency traders for Asia's downfall in the crisis, last year proposed that the gold dinar be used for international trade to prevent a repeat of the currency crisis.
Mahathir said paper currency had no intrinsic value, making the exchange rate "arbitrary and subject to manipulation as we saw during the Asian financial crisis."