TOKYO -- Former Malaysian Prime Minister Mahathir Mohamad, who dealt with the 1997 Asian financial crisis during his time as the country's leader, said at a forum in Tokyo on Tuesday that no single currency should be dominant, including the Chinese yuan.
Since the crisis in Southeast Asia two decades ago, Mahathir and many others have argued that Asia should reduce its reliance on the dollar, as fluctuations in its value can create economic shocks. The region is still largely reliant on the dollar, but China is trying to encourage the use of the yuan as an international reserve currency. It is also moving ahead with its Belt and Road Initiative, a string of large infrastructure projects meant to forge stronger economic links across Asia.
"No single currency should be made the international currency," Mahathir said, regarding the yuan's role in fostering financial stability. "The best thing," he said, "[would be] to have a special international currency," such as a common trading currency whose value [is] linked to gold, so that movement of value is small. "If China wants to make the renminbi [yuan] an international currency, it should be anchored to the value of gold," he said.
Regarding the Belt and Road Initiative, Mahathir said it is "a good idea if you use the sea passage through the Straits of Malacca and the South China Sea." However, it does not need to be protected, he said. "We should not have military or naval ships protecting the trade route."