Attacks on regional currencies 'may spread'<\/p>\n
KUALA LUMPUR (Dow Jones): With Russia the latest country to
\ndevalue its currency in the face of growing market pressure,
\nMalaysia's Prime Minister Mahathir Mohamad yesterday warned that
\nspeculative attacks on developing countries may spread.<\/p>\n
"I'm worried that if the attacks on developing nations'
\ncurrencies continue, the pressure will spread to other countries
\nthat could have prevented it," Mahathir told a gathering of
\nworkers to mark the country's labor day.<\/p>\n
"The currency attack is now at dangerous and irresponsible
\nlevels," he added.<\/p>\n
On Monday, the Russian central bank ended months of
\nspeculation and denials by effectively devaluing the ruble by
\n33.6 percent, as well announcing the forced restructuring of
\ndomestic debt and a moratorium on ruble-denominated debt owed
\noverseas.<\/p>\n
The devaluation move just came weeks after the International
\nMonetary Fund cobbled together a near-$23 billion package to
\nstabilize Russia's stressed financial markets. Since Thailand
\ndevalued its baht last July, much of East Asia has been hit with
\nmassive currency depreciations which have spread as far as South
\nAfrica, Eastern Europe and now Russia.<\/p>\n
"Russia has a nuclear bomb, they may want to use it now,"
\nMahathir joked.<\/p>\n
Mahathir has repeatedly stated his belief that Western
\ninterests are hell-bent on destabilizing Asian and other
\ndeveloping countries. He argues that shadowy forces use financial
\nmarkets to wipe out wealth and topple governments, and that
\nsudden flows of capital should be reined in.<\/p>\n
In Southeast Asia, only Mahathir and Singapore's Prime
\nMinister Goh Chok Tong, have managed to stay in office over the
\nlast year or so.<\/p>\n
Mahathir's words don't appear to be lost on the international
\ncommunity. Agencies such as the International Monetary Fund and
\nWorld Bank, as well as individual governments, are now assessing
\nthe need for curbing potential destabilizing capital flows in the
\nglobal financial system.<\/p>\n
The blunt-speaking premier also expressed his view that since
\nforeign powers have successfully crippled the country's economy,
\nthey are now preventing Malaysia from recovery.<\/p>\n
Citing recent downgrades on Malaysia's sovereign credit
\nworthiness by Moody's Investors Service and Standard & Poor's,
\nMahathir said "They purposely lowered our ratings so that we
\ncannot afford to pay the interest rates."<\/p>",
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