KUALA LUMPUR (Commodity Online) : Amid official barring, the ‘Islamic currency’ introduced in the northern Malaysian state of Kelantan seems to have gained much popularity in the State.

According to Kelantan Golden Trade Association, the gold coins and silver dirhams introduced in early August by the Islamic opposition party PAS as an alternative to paper money are a runaway success.

The first batch of gold and silver coins worth two million ringgit ($625,000) had been sold out in less than a month, it said in a statement.

"There is enormous response. In Kelantan, businesses including garage owners and taxi drivers are using the gold and silver coins." the statement added.

Civil servants in the state are paid up to 25 per cent of their salary in dinars and dirhams if they wish.

It said three more states controlled by the opposition - Selangor, Kedah and Penang - had indicated interest in minting similar coins and by the end of the year sales of the dinars and dirhams to hit 60m to 70m ringgit.

According to Islamic law, the dinar coin is 4.25 grams of gold, while the dirham is 3grams of pure silver.

A gold coin is equivalent to about 582 ringgit ($183), while the silver coin is worth around 13 ringgit but their values fluctuate according to market prices.

The coins were intended to be used as an alternative to the ringgit and sen but are not legal tender.

Former premier Abdullah Ahmad Badawi, whose administration promoted a moderate form of Islam that emphasised economic and scientific development, shot down the proposal to use traditional Islamic currencies.

But his predecessor Mahathir Mohamad was an advocate of the dinar system and urged Muslim countries to use it as a trade instrument.

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