KUALA LUMPUR, May 30 (Reuters) – Malaysian Prime MinisterMahathir Mohamad on Thursday mooted the idea of a common tradingcurrency for East Asia that would be pegged to gold, describingthe existing currency trading in the region as manipulative.
Mahathir said the proposed common currency could be used tosettle imports and exports, but would not be used for domestictransactions.
“In the Far East, if you want to come together, we shouldstart with a common trading currency, not to be used locally butfor the purpose of settling of trade,” he said at the NikkeiFuture of Asia conference in Tokyo.
“The currency that we propose should be based on goldbecause gold is much more stable.”
He said under the current foreign exchange system, localcurrencies were affected by external factors and weremanipulated. He did not elaborate on how they were manipulated.
Mahathir has long been a critic of currency trading, andonce famously accused billionaire George Soros of bettingagainst Asian currencies.
During the Asian financial crisis, Mahathir pegged theringgit currency at 3.8 to the dollar and imposed capitalcontrols. That peg was scrapped in 2005.
Mahathir served a 22-year term as prime minister beforestepping down in 2003. He was re-elected in May last year in ashock election, defeating the Barisan Nasional coalition thathad ruled Malaysia for the six decades since independence.
Earlier this week, the Trump administration said no majortrading partner met the criteria required to be placed on theU.S. Treasury Department’s list of its currency manipulators butnamed Malaysia among nine countries that required closescrutiny.
In response, Malaysia’s central bank said on Wednesday itsintervention in currency markets was limited to managingexcessive volatility.
(Reporting by Rozanna Latiff, writing by A. Ananthalakshmi;Editing by Sam Holmes)
