The Gold Dinar
Malaysia has stated that it plans to start a gold dinar scheme as early as mid 2003. Malaysian Prime Minister Dr. Mahathir bin Mohamad
has hosted conferences to explain and "Sell" the concept of the gold dinar. It is not intended that there should an actual gold dinar coin, or that it should be used in everyday transactions, the gold dinar would be an international unit of account for international settlements between national banks. If for example the balance of trade between Malaysia and Iran during one settlement period, probably three months, was such that Iran had made purchases of 100 million Malaysian Ringgits, and sales of 90 million Ryals, the difference in the value of these two amounts would be paid in gold dinars.
What is the Value of a Gold Dinar?
Although we have seen a claim that the first gold dinars was issued in 1992, we do not know of any such Malaysian coin, although we believe a private company may have issued their own unoffical version. From the reports of the Malaysian conferences, we deduce that the gold dinar would be one ounce of gold or its equivalent value.
The Islamic Dinar
Malaysia has suggested that its trading partners in the Islamic world should all use the gold dinar. This appears to be politically motivated, as one of its main aims appears to be to reduce the dependence of the Islamic world on the US dollar for international settlements. It may also be intended to attack the value of the dollar by means of Islamic nations and their people, selling dollars and switching into gold dinars. Malaysia has stated its hope that other non-muslim countries would also use the gold dinar, although this may have been to deflect any criticism of the scheme as a closed-shop muslims only, anti-western club.
The Malaysian Dinar
The Malaysian currency system uses the ringgit as its main denomination, and all its gold coins have been issued with values in ringgits. No Malaysian gold dinar coins have ever been issued.
The Effect on the Gold Price
If the entire Islamic world were to ditch the US dollar, and use gold as its main or only reserve currency, then this could have a major influence on the gold price, and a similar but opposite effect on the value of the US dollar. We have seen very bullish opinions about this, but we believe that a gold dinar scheme for interbank settlements would not necessarily create a huge and sudden demand for gold, but a switch by businesses and individuals out of dollars and into gold could have a greater effect over the long term.
No Gold Dinar Coins
We have been receiving a growing number of enquiries about the availability of gold dinars, and as you can gather from the above, it appears unlikely that any will be issued as gold coins. There is certainly no plan to issue a competitor to the Krugerrand and other one ounce bullion coins.
Privately Issued "Dinars"
One source quotes the following specifications for what appears to be an unofficial privately issued version of a "gold dinar"
We also show an image of one of these coins.
Please note we do not have any stock of these "coins", or any plans at present to deal in them.
Denomination||Diameter||Weight||Alloy||AGW Gms||AGW Ozs
Real Gold Dinars
Many countries in the arab world have used dirhams or dinars as part of their currency systems as various times during the last two thousand years. The word dinar derives from the latin word denarius, which was actually a silver coin, and the origin of the "d" in the British "£.s.d" system, abbreviations for the latin words libra, solidus, and denarius.