Camdessus says Asia currencies fell too far
Camdessus says Asia currencies fell too far
LONDON (Reuters): International Monetary Fund (IMF) chief
Michel Camdessus said yesterday that Asian currencies had fallen
too far following the financial crisis in the region.
In an interview with the Financial times, Camdessus also
defended the IMF against charges it had failed to see the Asian
financial crisis looming and blamed Asian governments for failing
to avert trouble.
Camdessus defended the sharp rises in interest rates in the
Asian countries that followed the imposition of IMF programs,
saying these had to be seen in the context of the collapse in
confidence in the region.
The IMF had not intended to produce a big depreciation in
currency values, Camdessus said.
"On the contrary, in our view these currencies have
depreciated far more than is warranted or desirable," he said.
"The first order of business was, and still is, to restore
confidence in the currency," Camdessus said.
The IMF managing director said the Fund had seen the problems
developing in Asia but had been unable to persuade the
governments to act early enough.
"A point that is central to analyzing the cause of the crisis
is the denial syndrome," Camdessus told the Financial Times in
the interview in New York.
After 30 years of economic success, the Asian nations felt a
sense of "impregnability", Camdessus said.
He had visited Bangkok four times, twice in secret, but failed
to persuade the Thai government to unpeg its currency from the
dollar, the newspaper said.
It said the IMF was also hampered by having unreliable
economic data.
Camdessus declined to say whether he believed the crisis was
over and instead considered the prospects for individual
countries.
South Korea was "turning the corner", Camdessus said. "The
(Seoul) government not only wants to implement the program but go
beyond it if needed..."
"I would say, with perhaps a little less emphasis, the same
about Thailand, where the authorities are extremely determined to
implement the programs," he added.
But on Indonesia, Camdessus "implied" that the problem was
largely political and that prospects remained murky until, the
president chooses a running mate in the coming elections.
Camdessus said he had received assurances from Chinese leaders
that they would not trigger a further crisis by devaluing their
currency in proportion to their neighbors'.
"He sounds rather less confident about the ability of the
Japanese government to take the steps needed to restructure the
banking system and provide a fiscal stimulus to its ailing
economy," the Financial Times said.