IMF and ASEAN ministers to discuss forex rules

IMF and ASEAN ministers to discuss forex rules

KUALA LUMPUR (Reuters): The International Monetary Fund will
brief Southeast Asian finance ministers next month on the
progress of a study on regulated currency trading, a Malaysian
government spokesman said on Saturday.

IMF managing director Michel Camdessus will meet ASEAN finance
ministers and was expected to brief them "on the progress of the
study on prudential regulation with regard to currency
speculation," Adlin Zabri, press secretary to Finance and Deputy
Prime Minister Anwar Ibrahim told Reuters by telephone.

"It is more of a progress report of the study being carried
out by the task force set up by the IMF," added Adlin.

Malaysian Prime Minister Mahathir Mohamad has been the most
vocal proponent of a system of globally-regulated currency
trading in recent months after the ringgit and several other
Southeast Asian currencies came under sustained attack by hedge
funds.

The ringgit has lost over 25 percent of its value against the
U.S. dollar since July.

"One of his (Anwar's) proposals is sure to be that we must
have a specific market where these currency traders can register
themselves and get a seat number," said Mahathir on Oct. 8.
"We must know all this because only then can we trade. Here we
trade with someone who we do not know," he added.

In a speech on the fringes of the IMF/World bank meetings in
Hong Kong in September, the premier called currency trading
"unnecessary, unproductive and totally immoral".

Mahathir singled out U.S. hedge fund manager George Soros as
one of the key instigators of the currency crisis.

"At the upcoming meeting (of Southeast Asian finance ministers
on Dec. 1), IMF will inform us the development in fixing
procedures or prudential regulations governing movement of hedge
funds," Anwar was quoted by the national Bernama news agency as
saying earlier on Saturday.

An IMF spokesman said in October the body had agreed to
examine the role played by hedge funds in the fall of Southeast
Asian currencies.

The meeting would be hosted by Malaysia and would be joined by
representatives from Australia, Japan, Korea, China and Hong
Kong, said Adlin.

ASEAN comprises Brunei, Myanmar, Indonesia, Laos, Malaysia,
the Philippines, Singapore, Thailand and Vietnam.

The ringgit closed at 3.3400/00 against the U.S. dollar in
Kuala Lumpur on Friday, from its previous level of 3.4250.

AFP reported from Washington Friday that U.S. finance
officials were to meet in Manila Nov. 18-19 with Asian
counterparts to discuss Asian financial markets as well as calls
for a regional rescue fund.

The announcement signaled renewed U.S. interest in the
troubled economies of Southeast Asia and followed a statement by
Treasury Secretary Robert Rubin that Washington was prepared to
provide Indonesia with $3 billion.

But Rubin stressed that the funds would only be made available
if they were needed to supplement a $23 billion dollar financial
package for Jakarta unveiled here earlier in the day by the
International Monetary Fund.

"The Treasury and the Federal Reserve are also in the process
of consulting with countries in Asia on ways to enhance
mechanisms for regional cooperation and, more generally, to
strengthen the capacity of the IMF and the international
financial system to prevent and, when necessary, respond to
financial crises," Rubin said in a statement.

Earlier in the week Federal Chairman Alan Greenspan told
Congress the United States should consider providing temporary
financial help to Asian economies struggling with weak
currencies, unreliable financial sectors and other growth-related
maladies.

The Treasury Department official said Friday that
representatives from the U.S. Treasury and the Federal Reserve
would be attending the Manila meeting.