ASEAN seeks united defense for battered currencies

ASEAN seeks united defense for battered currencies

SINGAPORE (AFP): Southeast Asian leaders yesterday called for
a united front to defend their embattled currencies, as the units
plunged to new record lows.

Philippine President Fidel Ramos said his Indonesian
counterpart Soeharto and Thai Premier Chavalit Yongchaiyudh had
agreed on the need for a common strategy. Japan, meanwhile said
it was confident a regional facility, coined the Asian Monetary
Fund, would be established to maintain financial stability.

The comments came as the Indonesian rupiah, Philippine peso
and Malaysian ringgit hit record lows. The usually unflappable
Singapore dollar fell to a 39-month low and the Thai baht closed
with its value against the greenback down some 40 percent from
July 2, when its effective devaluation plunged regional
currencies into chaos.

Ramos said he had spoken late Tuesday by telephone with
Soeharto and that the Indonesia leader agreed there was a need to
defend the region's currencies.

"We spent more time (in our conversation) on the putting up of
a common front against the speculative attacks on our national
currencies," Ramos told reporters at his weekly news conference.

"This is a common front in regard to policy, a common front in
regard to actions that need to be taken by our respective banks."

He said the Thai premier had also agreed on the move, adding
they discussed the issue during a meeting in Bangkok when Ramos
made a stopover there while returning from Europe recently.

The "common front" would be mechanisms agreed by the
countries' finance ministers, Ramos said, adding he hoped it
would be in place before the ASEAN leaders' summit in Kuala
Lumpur late this year.

ASEAN, the Association of Southeast Asian Nations, groups
Brunei, Myanmar, Indonesia, Laos, Malaysia, the Philippines,
Singapore, Thailand and Vietnam.

By that time "not only will we have the speculative attacks
stop and the economies brought back on the path of recovery and
health but also that we will have some mechanisms to utilize to
defend ourselves from future speculative attacks," Ramos said.

The blaming of currency speculators has become a common
refrain in some Asian quarters, led by Malaysian Prime Minister
Mahathir Mohamad who has called for the jailing of "rogue"
traders and for a ban on speculative trades.

Mahathir, speaking Tuesday during an official visit to Chile,
said the root of regional exchange rate instability was the U.S.
dollar rather than local units, saying the greenback was
inherently unstable.

"There must be safeguards against abuses or rogue traders," he
said.

Ramos said he also backed the "Asian Monetary Fund," which
would be "a reserve of sorts to be made available to those that
might need it at a particular time but which are always
reimbursable."

Japan -- Page 10