A STATE-OWNED gold company in Malaysia has stressed that the country's new silver and Gold Coins are not legal tender amid reports of growing monetary use.
Introduced last month by the Islamic PAS opposition party as an alternative to the official Ringgit last month, the Silver Dirham and Dinar Gold Coin weigh 3 grams and 4.25 grams respectively. The first minting, worth some two million Ringgit (US$640,000), has now sold out since being issued at the start of Ramadan.
"There is an enormous response in Malaysia," said Umar Ibrahim Vadillo, chief executive of Kelantan Golden Trade, at a press conference on Saturday. "Kelantan businesses including garage owners and taxi drivers are using the gold and silver coins."
Civil servants in the opposition-controlled region now receive up to 25% of their salary in Gold Coin Dinars and silver Dirhams.
"Of course it is not legal tender," Umar told reporters. "The Gold Dinar is a commodity. The use of it is on a voluntary basis."
Umar said three more opposition-controlled states in Malaysia are considering minting similar silver and Gold Coins. The news comes as a senior government advisor in Vietnam also warned of increased gold demand, spurred by the ongoing devaluation of the official Dong currency.
"People will switch to gold as a shelter," said Le Xuan Nghia, vice chairman of the National Financial Supervision Commission, which advises the prime minister, Nguyen Tan Dung.
"The current situation with the Dong will spur people to increase their gold holdings."
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