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.