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."
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