August 14, 2010

The state government of Kelantan makes dinar and dirham legal tender

Kelantan makes dinar and dirham legal tender

By Nik Imran Abdullah

KOTA BARU: The state government yesterday issued RM2 million worth of gold dinar and silver dirham coins which can be used by members of the public as an alternative currency to shop in Kelantan.

Menteri Besar Datuk Nik Abdul Aziz Nik Mat said about 1,000 shops, including restaurants in the state, had agreed to accept the state-minted dinar and dirham in exchange for goods and servcies.

"The use of dinar and dirham as substitutes for normal currency notes for trade is not against the law as we have followed Bank Negara regulations."

Permodalan Kelantan Berhad employee Ruzaini Yaakub showing the gold dinar and silver dirham coins launched in Kota Baru yesterday. — NST picture by Syamsi Suhaimi

Nik Aziz said the state government introduced the gold dinar currency as history had shown that the gold dinar and silver dirham were inflation-proof as the metals could retain their value in any economic situation.

"For example, the price of chicken in the time of our prophet was about one dirham and now the value of our dirham is rated about RM13, which is about the market price of a chicken now.

"The dinar and dirham are important to Muslims to show to the world that we have our own currency system to trade," Nik Aziz said after launching the Kelantan gold dinar and dirham as syariah currencies at the Kelantan Trade Centre.

As a symbolic gesture, Nik Aziz said the salary of the Kelantan Menteri Besar Incorporated chief executive officer was paid with gold dinar coins to commemorate the launch of the syariah currency.

Asked whether other state civil servants would also be paid with the dinars, he said there was no such plan yet but he would agree to this if there were efforts to pay them in gold dinars.

He also said he would pay his tithe this year using the gold dinar and encouraged others to do the same as there were benefits in using the syariah-compliant dinar.

In a related matter, state Economic Planning, Finance and Welfare Committee chairman Datuk Husam Musa said the Kelantan dinar and dirham complied with the World Islamic Mint's standard.

"Our first batch of gold dinar and silver dirham production has been oversubscribed. We will mint more to meet the demand from the public."

He said a network of agents to sell and buy dinars and institutions for safe keeping of the coins would also be set up to complete the new monetary system in the state.

He said plans were under way to introduce gold bullion to be used for transactions involving high amounts of funds, which were usually used by investors.

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