Group of 15 backs proposal for new currency rules
Group of 15 backs proposal for new currency rules
KUALA LUMPUR (Reuters): The Group of 15 (G-15) developing
nations rallied yesterday behind Malaysia's call for currency
trading rules and ordered a plan to avert renewed market
turbulence that has shaken Southeast Asia's economies.
G-15 leaders ended a three-day summit in Malaysia's capital
with an agreement to meet more often to improve the coordination
of positions, and moved up their next meeting to May 1998 in
Cairo.
The seven-year-old bloc called on rich nations to provide
greater access to their markets and capital, and denounced a U.S.
trade law that authorizes unilateral trade sanctions.
The host, Malaysian Prime Minister Mahathir Mohamad, succeeded
in thrusting the currency issue to the top of the summit agenda.
Currencies and stock markets in Malaysia and other Southeast
Asian nations have been undermined by a massive selloff since
July, when a financial crisis erupted in Thailand.
"This issue of the practices of many market people is like a
virus," said National Planning Minister Ayo Ogunlade of Nigeria.
"It knows no boundaries. It has affected Southeast Asia and Latin
America...It could also affect Africa."
The G-15, which on Monday adopted a special statement
expressing deep concern over the currency turmoil, announced on
Wednesday that member states' finance ministers will meet next
month to make foreign exchange trade recommendations.
"They will draft rules and regulations to be submitted to the
IMF," Mahathir told a news conference.
Mahathir said the officials would meet at the same time as
finance ministers from the Association of South East Asian
Nations (ASEAN), set to gather on Dec. 1 and 2 in Kuala Lumpur.
The head of the International Monetary Fund, Michel Camdessus,
was expected to present a paper on currency trade at the ASEAN
meeting.
"The recommendations will be circulated to the heads of
government for approval immediately," Mahathir said in a speech
to the concluding session. "The heads of government are expected
to forward these to the IMF and the World Bank."
Mahathir said there were rules governing stock markets but
none in currency markets.
"We need to know where the money is coming from. Is it hot
money, money laundering?" he said. "Sometimes they are dealing
with drug money, so regulations should be drawn up to make sure
that they trade in real money and they pay real taxes."
Indonesia President Soeharto said his country, backed by an
IMF recovery plan, had recovered from its financial crisis.
"The monetary crisis in Indonesia is a matter of confidence in
our rupiah, in our currency. We have recovered," he said.
The G-15 members are Algeria, Argentina, Brazil, Chile, Egypt,
India, Indonesia, Jamaica, Kenya, Malaysia, Mexico, Nigeria,
Peru, Senegal, Venezuela and Zimbabwe. Kenya was admitted to the
group on Monday.
The heads of state or government from six nations -- Algeria,
Egypt, Indonesia, Malaysia, Peru and Zimbabwe -- attended the
summit, prompting debate over low attendance.
The leaders rejected a proposal to meet every two years, and
moved up the next meeting to May 1998.
In a joint communique, the G-15 leaders called for greater
access to rich nations' markets, capital and technology, and
denounced a U.S. trade law that authorizes Washington to impose
unilateral sanctions.