ASEAN ministers' meeting to discuss forex volatility<\/p>\n
BANGKOK (Reuter): Southeast Asian finance ministers meet in
\nThailand this weekend and are expected to explore ways of
\ncountering any future volatility of their currencies that are
\ntied to a bullish U.S. dollar.<\/p>\n
Government officials and analysts said recent sharp swings in
\nregional currencies and related capital outflows would figure
\nhigh on the agenda of the first finance ministers' meeting of the
\nAssociation of South East Asian Nations (ASEAN) in Phuket,
\nsouthern Thailand.<\/p>\n
Market analysts said they expected the seven-member group to
\ndiscuss possible cooperative moves in cushioning any further
\npressure on their currencies, taking the lesson from recent
\nsporadic attacks on the Thai baht.<\/p>\n
\"I think the clearest issue is how would countries in the
\nregion deal with a crisis situation such as that happening to the
\nThai baht over the past two to three weeks,\" said Wong Yit Fan,
\nStandard Chartered Bank's Southeast Asian chief economist.<\/p>\n
\"One of the topics is cooperation on regulating capital flows
\nand stabilizing our currencies. We would probably discuss
\nmeasures to achieve this but it is premature to say what we are
\ngoing to do,\" said Pongpanu Savetaroon, director of Thailand's
\ninternational economic policy division.<\/p>\n
ASEAN currencies that are tied to the U.S. dollar have
\nappreciated sharply against the yen and mark in the past year in
\ntandem with the greenback at a time when regional exports face
\nserious slowdowns.<\/p>\n
Asked if the ministers would touch on the effect of the strong
\ndollar on regional currencies when they discuss macroeconomic
\nissues, a senior Malaysian official said: \"I believe anyone can
\nraise that issue under that agenda item.\"<\/p>\n
Analysts said they expected the ministers to review the
\nmarket's flight from the baht in early February which created a
\nsevere liquidity crunch and forced Thailand to increase short-
\nterm domestic interest rates in a bid to curb capital outflows.<\/p>\n
Lawrence Hatheway, chief economist at UBS Securities
\n(Singapore) Pte: \"Clearly in the back of their minds must be some
\nsort of cooperation that might arise in the event that there was
\na balance of payments crisis ... (or) a funding crisis for one of
\nthe countries that might be in deficit.<\/p>\n
\"It's a discussion about what sort of measures, what sort of
\ninstruments, might be available to them to help one another out
\nthat clearly could be under discussion here,\" he added.<\/p>\n
But Pongpanu said any ASEAN cooperation to boost currency
\nstability should not be interpreted as economic weakness.<\/p>\n
\"This does not mean that ASEAN members are facing problems.
\nEvery member is currently strong. Even the Philippines, once
\nviewed as a sick man, now stands solid,\" he said.<\/p>\n
Other members of the grouping are Thailand, Singapore,
\nMalaysia, Brunei, Vietnam and Indonesia.<\/p>\n
Hatheway of UBS Securities warned against high expectations of
\nthe one-day meeting. \"I think it would be premature to expect too
\nmuch out of this ... in terms of new policy initiatives for the
\nregion as a whole.<\/p>\n
\"I don't think there will be any concrete resolutions to any
\nparticular problem they are facing, but an opportunity to get
\ntogether as a club to think about how to organize themselves for
\nfuture discussions ...\"<\/p>\n
Senior ASEAN officials said the ministers would on Saturday
\nsign two broadly worded agreements on cooperation in finance,
\nbanking, capital market development, customs procedure,
\ninsurance, and taxes.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-ministers-meeting-to-discuss-forex-volatility-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}