Goh says 'you can't fight market'

Goh says 'you can't fight market'

TOKYO (Reuter): Singapore Prime Minister Goh Chok Tong said yesterday that despite recent turmoil, economic fundamentals in Asia, including Thailand, were sound.

Goh did not point a finger at currency speculators for the turmoil and warned the region's central bankers they would be fighting a losing battle if they tried to counter market attacks on overvalued currencies.

"I take a view that you can't fight the market," Goh said when asked whether he believed Asia was gripped by a currency crisis due to overvaluation of Asia as a world financial center.

"If the market believes that currencies are overvalued and the sentiment is that they therefore should sell the currency, it is difficult for any central bank to fight that sentiment." he told a news conference in Tokyo.

The Thai baht, Malaysian ringgit, Philippine peso and Indonesian rupiah have dropped sharply against the dollar in recent months due to attacks by currency speculators.

Last week Malaysian Prime Minister Mahathir Mohamad rapped the United States for refusing to regard the currency moves of financier George Soros as a crime.

Mahathir accused Soros of attacking the currencies of the members of the Association of Southeast Asian Nations (ASEAN) to punish the group for accepting military-ruled Myanmar into the organization.

Soros has said that he was not involved in the currency sell- offs.

Goh, who is on the last day of a four-day visit to Tokyo, said that the economic fundamentals of Asian countries were sound.

"I hold the view that the economic fundamentals are sound despite the current turmoil," he said.

The currency crisis in Thailand derived mainly from the country's sluggish exports and excessive property investments, he said.

Goh said it would take a little time for Thailand to overcome its foreign exchange problems but that the country's economic fundamentals were "pretty sound".

He said Singapore had been little affected by the Asian foreign exchange turmoil.

The Singapore dollar has lost 5 percent of its value against the U.S. currency but only 1 percent against the basket of currencies of its major trading partners, Goh said.