LONDON, 8 November - Chairman of the World Bank, Robert Zoellick called on leaders of the world conomy re-consider the use of gold in the monetary system as a measure of the currency movements. He made the proposal for fear that occur "currency war" in a letter published in the Financial Times.
Zoellick said the system would need to be involved in the dollar, euro, yen, British pound and the enminbi is now traded internationally.
''There will also be considering the use of gold as an international reference for relevant market expectations of inflation, deflation and currency futures,’ he added.
United States (U.S.) is now more consistently criticized China for lowering the value of the renminbi in order to take advantage of export markets.
Following the criticism, China replied back with a print of U.S. $ 600 billion (RM1.8 trillion) of new money while claiming to give the U.S. a competitive advantage.
''If domestic policy is optimal policy for the U.S., but at the same time, it is not the optimum policy for he world, it may bring many negative consequences to the world, ‘according to the Chairman of the Central Bank of China, Zhou Xiaochuan.
China expressed concern over the U.S. Federal Reserve monetary policy will reduce the value of the dollar, causing the country's exports declined.
Following that, China urged to monitor the movement of U.S. dollars during the G20 meeting in Seoul this week.
Gold Standard be marginalized by former U.S. President Richard Nixon in 1971 as the dollar fell sharply against gold.
Gold believed to help deal with inflation, but it is not allowed for a flexible monetary policy, which most economists are claiming it is necessary to deal with economic shocks. – AFP
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