REPORTING FROM TOKYO

Malaysian Prime Minister Mahathir Mohamad has proposed a new currency to be used, based on gold.

He believes it will make a more stable currency, as compared to the current trading system.

New currency based on gold

Speaking at the Nikkei Conference in Japan, Mahathir said the fact that the global market is currently tied to the American dollar opens the currency to manipulation.

He added that the stability of the American dollar is not due to the performance of the American economy.

A new currency based on gold could be used to evaluate the export and import activities among the East Asian countries, he said.

Criticised the U.S. for placing countries on watchlist

In response to a question from the moderator, Mahathir explained that should countries be downgraded or upgraded, it should be done by an international uncommitted forum, and not by any country.

He then made a pointed rebuke to the recent U.S. decision to place nine countries, including Singapore and Malaysia, on a watchlist of nations that require further scrutiny for its macroeconomic and foreign exchange policies.

Here, Mahathir fires his first salvo.

"If any country is to be downgraded or upgraded, it should be done by some international, uncommitted forum, not by any country."

He then took more shots at the U.S.

"But the U.S. is fond of labelling that country is no good, this country is no good. We have to do business only in that country, in this way. If you are not democratic, then we are going to...That is not for any single power to decide."

He concluded:

"If you want to live in a united world, a stable world, we must resort to stability through agreement between all nations that have a stake in that problem."

Not the first time he said it

This isn't the first time Mahathir has held up gold as a solution to currency woes.

Mahathir first proposed a common regional currency during the 1997 Asian financial crisis.

In 2017, he repeated the idea at a Tokyo forum, saying that there should be a "special international currency" with its value linked to gold, so as to reduce its volatility, according to the Nikkei Asian Review.

Back in 2010, Mahathir also advocated using the gold dinar as a solution to end currency wars.

The gold dinar used to be the currency of the Muslim world until the fall of the Ottoman empire in 1924.

Top image via CHARLY TRIBALLEAU/AFP/Getty Images