Monetary System in the Islamic and Conventional Historical Review

Monetary System in the Islamic and Conventional Historical Review

The prevailing monetary system now exists in the world has there after several days of evolution. Monetary system that has prevailed at the time of the Prophet Muhammad is a bimetallic standard where the gold and silver (dinars and dirhams) circulate continuously.

When the second caliph of the Umayyad dynasty (41-132 H/662-750 M) 2 ratio between the dinar and the dirham is 1: 12, and when the Bani Abassyiah power (132-656 AH / 750-1258 M) ratio reached 1:15 or kurang.3 Associated turunya dinar and dirham ratio continuously, the exchange rate between the dinar and the dirham has fluctuated in width at different times and in different parts of the Muslim countries. The ratio was very low down to reach even the 1:35 and 1:50.4 According to al-Maqrizi (d. 845 AH / 1442 AD) and his student al-Asadi (d. after 854 AH / 1450 AD), instability is possible because of the transfer or out bad circulation coin with a coin that baik5, where this phenomenon further in the 16th century will come known as the law Grasham (Gresham's Law).

The United States has adopted this bimetallic in 1792. Then in 1873 the U.S. to pull out the silver from the circulation of money due to price fluctuations between gold and silver. In 1880 the international standard and the majority of the state negar-silver bimetallic and monometallic switch to make the gold standard with gold as the basis of their currency. Under this standard, the currency of a country legally determined by a fixed weight of gold, and the monetary authorities are obliged to change the demand of domestic currency into gold, which legally established levels.

Based on history there are three types of gold standard: the standard gold coin (the gold coin standard) when the coin-active gold coin in circulation, gold bullion standard (the gold bullion standard) when the coin-gold coin in circulation but no monetary authority has been taken to sell gold bullion against the local currency and pertukaan standard gold (the gold exchange standard) or what is known as the Bretton Woods System of monetary authorities are required to exchange the domestic currency with U.S. dollars that can be converted into gold with a fixed parity. This system ended in August 1971 because the U.S. deficit after the second world war led to the continued decline in the ownership of gold and could not be determined kemampuannnya to keep konvertabilitas U.S. dollars into gold.

Since the end of the Bretton Woods System, the world monetary system adopted a new system is a full fledged standard of managed money is absolutely nothing to do with gold. This system was formally diimplemetasikan after the ratification of the second amendment to the articles IMF agreement in April 1978. Once the system is implemented, the world economy faced high inflation rates and the influence of instability in exchange rates. One of the main causes of inflation is the rapid expansion of money supply during 1971-1990's more than five times in industrialized countries and this is almost 12 times in dunia.9 The instability in exchange rates due to imposition of exchange-rate system float (floating exchange rate regime) in March 1973. However, to stabilize exchange rates within a system of floating exchanges rates needed discipline to fiscal policy and monetary good.

There is no specific text of the Qur'an and as-Sunnah that explains that the bimetallic system based on the applicable standards during the Prophet Muhammad and Islamic history of the first or even the full-bodied monometallic applicable standards and is obligatory for Muslims to use it constantly. This clearly be described in the historical fact that Caliph Umar ibn Khatab never thought to introduce the camel as a currency which then brings reflection to the writings of the Jurists' (Jurists) through Muslim history. For example, Imam Ahmad ibn Hanbal (w 241H/1328M) has observed that there was no damage in adopting another currency is generally accepted by masyarakat.11 Ibn Hazm (w 456H/1064M) also did not find some excuse for the Muslims to limit currency only to the dinar and dirham.12 Ibn Taymiyyah (w 505H/1328H) feel that the dinar and dirham not chill to their own sake just because of its ability to help be a medium of exchange tool.

However, this does not mean that a person can spend in any currency amount. The Jurists' majority have stressed that the currency should be issued by authority and rules must have a stable value, to express the efficiency of its function as a measure of value, a medium of exchange, and a store of purchasing power.15 The stability of the value of money is the main priority in the field of monetary management because of the stability of the value of money will help the realization of such goals lainnya16 needs, distribution of wealth and income are equal, the optimum rate of economic growth, full employment and stability ekonomi.17

Source : http://hendrowibowo.niriah.com/2009/03/05/sistem-moneter-islam-dan-konvensional-dalam-tinjauan-sejarah-2/