IMF-World Bank to discuss currency crisis<\/p>\n
SINGAPORE (AFP): Southeast Asia's currency crisis will come
\nunder the microscope at this month's global monetary talks amid
\ncomplaints that a decade's economic gains are being undermined by
\nforeign financial speculators.<\/p>\n
Regional authorities are expected to press the International
\nMonetary Fund (IMF) and the World Bank for measures to stabilize
\nfinancial systems and combat \"rogue\" speculators who have
\nhammered their currencies to all-time lows.<\/p>\n
Officials said the impact of the unprecedented financial
\nmarket turbulence unleashed by the Thai baht's July 2 float will
\nbe discussed in depth at the IMF-World Bank meetings in Hong
\nKong.<\/p>\n
\"The annual meetings will discuss and try to draw lessons from
\nthis,\" Hubert Neiss, head of the Asia and Pacific department at
\nthe IMF, said of the agenda for the series of IMF-World Bank
\nmeetings which open Sept. 15.<\/p>\n
In Kuala Lumpur Thailand's Deputy Prime Minister Korn
\nDabbaransi said on Saturday ASEAN finance ministers will take a
\ncommon stand on regional currencies at the IMF-World Bank annual
\nmeetings.<\/p>\n
Bernama news agency said Korn disclosed the plan after meeting
\nMalaysian Deputy Prime Minister Anwar Ibrahim who is also finance
\nminister.<\/p>\n
\"We will have our own meeting first in Bangkok and take a
\nstand on the currency issue. We will decide on ASEAN's position,\"
\nhe was quoted as saying.<\/p>\n
Thailand is to host a meeting of Asian and European finance
\nministers in Bangkok on Sept. 18 and 19. The ministers will then
\nfly to Hong Kong for the annual financial jamboree which brings
\ntogether finance ministers and central bank governor from across
\nthe world.<\/p>\n
In a recent visit to Singapore, Neiss acknowledged that the
\n\"regional contagion\" unleashed by the de facto devaluation of the
\nbaht was \"quite pronounced.\"<\/p>\n
Neiss, who led the IMF negotiations of a 17.2-billion-dollar
\nrescue package for Thailand, described the effect as sharp and
\nlong-lasting and noted it had jolted even countries with
\n\"impeccable fundamentals like Hong Kong and Singapore.\"<\/p>\n
The Thai baht has lost a third of its value against the US
\ndollar since the Bank of Thailand freed the currency, with its
\neconomy in deep crisis amid massive bad debts surrounding its
\nfinance sector.<\/p>\n
The Indonesian rupiah, the Malaysian ringgit and the
\nPhilippine peso have since hit a succession of all-time lows
\nunder the onslaught of speculators. Even the normally unflappable
\nSingapore dollar has not been spared.<\/p>\n
\"The regional turmoil was really precipitated by the Thai
\ncrisis,\" said Neiss, who traced Thailand's problems to \"a very
\nhigh current account deficit, a very high short-term
\nindebtedness, a very weak financial sector and a very rigid
\nexchange-rate regime.\"<\/p>\n
He said no other country in the region had such an \"explosive
\nmixture\" of shortcomings, but added that each country \"may have
\none or the other weakness which the present contagion has
\nexposed.\"<\/p>\n
Singapore, with adequate cover against short-term foreign
\nliabilities, impressive foreign exchange reserves of some US$80
\nbillion and a current account surplus, is the most resilient of
\nregional economies.<\/p>\n
Indonesia, Malaysia and the Philippines all are saddled with
\nsizable current account deficits and foreign debt while their
\nfinance sectors suffer from heavy exposure to the property
\nsector, economists note.<\/p>\n
Amid growing frustration at the ceaseless speculative attacks,
\nthe IMF has come in for criticism for failing to contain the
\nsnowballing effect of the currency crisis.<\/p>\n
Eddie Lee, regional economist at Vickers Ballas investment
\nhouse in Singapore, noted that present arrangements did not allow
\nfor the IMF \"to do anything unless the countries approach them.\"<\/p>\n
But market forces themselves have taken on the role of a
\nwatchdog of government policies and \"increasingly, governments
\nare listening to the markets,\" he said.<\/p>",
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