Thailand backs ASEAN currency trade idea<\/p>\n
BANGKOK (Reuters): Visiting Malaysian Prime Minister Mahathir
\nMohamad said yesterday Thailand had agreed to his proposal that
\nASEAN countries trade among themselves in their local currencies
\nas a way to overcome current problems.<\/p>\n
"He (Thai Prime Minister Chuan Leekpai) has agreed that we
\nshould do that but it will have to have some preliminary work
\nbefore implementing it," he told reporters.<\/p>\n
"And for this, he will be sending his deputy prime minister
\n(Supachai Panitchpakdi) to Malaysia to speak to my deputy," added
\nthe Malaysian premier, who left yesterday for Singapore.<\/p>\n
Mahathir said he had come to Thailand as part of a swing
\nthrough member countries of the Association of Southeast Asian
\nNations (ASEAN) to promote his idea of them using regional
\ncurrencies to conduct trading among themselves.<\/p>\n
ASEAN countries could use foreign currencies saved from such
\nintra-trade in local currencies to purchase vitally needed goods
\nfrom Europe and the United States, he added.<\/p>\n
But separately, Thai premier Chuan said the Malaysian proposal
\nwas a good initiative, although a more thorough study of it was
\nneeded.<\/p>\n
"It is a good initiative, but we are not ready and more and
\nthorough study needs to be done...like when we settle the debt,
\nwhat kind of currencies need to be used," he told reporters.<\/p>\n
"There is no conclusion now on this matter. Thailand has
\nassigned Deputy Prime Minister Supachai to further study
\nthis...whether it contradicts the agreement we have with the
\nInternational Monetary Fund," Chuan added.<\/p>\n
Thailand, unlike Malaysia, last August accepted a $17.2
\nbillion multilateral IMF bail-out package to beat a severe
\nliquidity squeeze and is bound by some terms attached to the
\nrescue package. The country is facing its worst economic crisis
\nin decades.<\/p>\n
On Thursday, the Thai Bankers Association said it supported
\nMalaysia's proposal, called the ASEAN payments system proposal,
\nand the use of the strong Singapore dollar as a common currency
\nfor intra-regional trading.<\/p>\n
Mahathir said Malaysia was ready to start implementing the
\nproposal almost immediately, but if it was to be done on a large
\nscale in the region, then there should be a clearing house that
\nshould handle settlement of payments in the various ASEAN
\ncurrencies.<\/p>\n
Unrealistic<\/p>\n
A proposal to use the Singapore dollar as a common trading
\ncurrency between Southeast Asian countries is unrealistic and
\nlikely to encounter resistance from several quarters, analysts
\nand currency dealers said yesterday.<\/p>\n
The Singapore dollar gained sharply on Thursday after the Thai
\nBankers Association (TBA) said it supported its use as a common
\ncurrency for trading within the nine-member Association of
\nSoutheast Asian Nations (ASEAN).<\/p>\n
TBA president Olarn Chaipravat said such a move would help
\ncurb the region's demand for U.S. dollars, removing pressure on
\nAsian currencies which have depreciated substantially since
\nThailand floated its baht in July.<\/p>\n
But analysts said Singapore's economy was too small and not
\nrepresentative enough of the region for such a proposal to work.<\/p>\n
"Singapore, although it's a major trader, is a very small
\neconomy. Hence the amount of Singapore dollars out there is not
\nthat great," said Simon Mahadevan Flint, senior emerging markets
\neconomist at research house I.D.E.A.<\/p>\n
He said the Monetary Authority of Singapore (MAS), the de
\nfacto central bank, was unlikely to warm to the proposal as it
\nhas long resisted the internationalization of Singapore's dollar.<\/p>\n
The MAS had no immediate comment on the proposal.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/thailand-backs-asean-currency-trade-idea-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }