ASEAN currency may curb speculation

ASEAN currency may curb speculation

MANILA (DPA): The creation of a single currency for the Association of Southeast Asian Nations (ASEAN) will help the region surmount potential fluctuations in the value of currencies, a Philippine trade official said.

Assistant Trade Secretary Edsel Custodio said Tuesday that leaders from the seven-member grouping, who are on their second year of putting on track a free trade area in the region, endorsed the single currency plan "in principle" at the fifth ASEAN summit in Bangkok two weeks ago.

Custodio said events like the Mexican crisis that affected Asian markets in January and the collapse in February of Britain's Barings Bank due to losses in futures trading by its Singapore-based trader highlighted the need for ASEAN monetary authorities to come together.

"Monetary cooperation, like other forms of cooperation, becomes more essential as we integrate economically," Custodio reasoned.

ASEAN officials prefer that currencies of the member-countries remain as legal tender even after the ASEAN single currency - which will initially be limited to the use of investors doing business in the region - has been created, Custodio added.

Regional authorities have also proposed to set up a fund administered by ASEAN central banks from which countries suffering currency problems and foreign currency fluctuations could draw loans from.

ASEAN consists of Thailand, Singapore, the Philippines, Brunei, Indonesia, Malaysia and Vietnam.