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Mahathir Proposes Single Global Currency

June 11, 2001

TOKYO (Nikkei)--Malaysian Prime Minister Mahathir Mohamad on Friday proposed the creation of a single international currency that would anchor global trade.

The currency, in which banking reserves would be held, should belong "to no one country," Mahathir said in a speech here at the Future of Asia conference sponsored by Nihon Keizai Shimbun Inc.

"Rates of exchange should be based on this one currency which can be used for payment of all international trade," he said. "Earnings in this currency must be immediately deposited with a nation's central bank, and local currency issued for local transactions."

Mahathir stressed that currencies "must never be traded as commodities."

Devaluation of a local currency against the global currency should be decided by "a panel of central banks and the international bank," he said. "No country should dominate international finance and commerce."

In another speech at the conference, Supachai Panitshpakdi, former deputy prime minister and minister of commerce of Thailand, argued that drawing on the lessons learned from the regional currency crisis, Asia should set up its own currency fund modeled on the International Monetary Fund.

Yoo Sang-boo, chairman and chief executive officer of South Korean steelmaker Posco, proposed setting up a small-scale economic zone that would bridge South Korea, China and Japan.

The steel industry consolidation among Japan, South Korea and China marks a "key pilot case" of such a zone, he said.

(The Nihon Keizai Shimbun Saturday morning edition)

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.