Asian currency crisis threatens world: Chuan

Asian currency crisis threatens world: Chuan

BANGKOK (AFP): Thai Premier Chuan Leekpai warned yesterday
that the Asian currency storm which has seen local units sink to
record lows will also affect "economies of developed countries.

Chuan made the comment as regional currencies slumped to
record new lows as the Korean won crashed over the country's
economic woes.

Chuan said the currency dilemma would be high on the agenda of
leaders of the Association of Southeast Asian Nations when they
meet in Malaysia next week for an informal summit.

"We will talks about it as this problem will also affect
developed countries such as the United States," the prime
minister told reporters, explaining that the West had made
massive investments in once-booming Asia.

He cited U.S. President Bill Clinton as saying that one third
of U.S. foreign investment was in this continent.

The Thai baht hit an historic record of 43.55 to the dollar
Thursday, a dip of more than 40 percent since the currency's
effective devaluation in July, the event which sparked Southeast
Asia's current turmoil.

Chuan said the latest dip was sparked by the regional economic
troubles, not domestic Thai issues, adding that the baht would
rally when a new commercial bank was set up to deal with the
assets of 56 permanently closed finance firms.

The government on Monday shut all but two of the- 58 suspended
firms in a bid to limit the damage to the embattles economy posed
by the companies' massive bad debts.

It announced it would set up at least one commercial bank to
dispose of the good assets of the firms once they had been
separated from the bad over the coming months.

Investors have welcomed the authorities' action, but are
waiting to see how the firms' assets will be dealt with.