IMF talks end in consensus on exchange rates
IMF talks end in consensus on exchange rates
JAKARTA (JP): A two-day conference on ASEAN economics ended
here yesterday, with consensus that significant misalignment of
regional exchange rates must be avoided.
The conference, co-sponsored by Bank Indonesia and the
International Monetary Fund (IMF), also concluded that sound
macroeconomic fundamentals were important, especially those
relating to fiscal policies, domestic savkngs rates and
investment.
Bank Indonesia Governor J. Soedradjad Djiwandono said the
conference's conclusions were important guidelines for the future
growth of the Association of Southeast Asian Nations (ASEAN),
which groups Brunei, Indonesia, the Philippines, Malaysia,
Singapore, Thailand and Vietnam.
On macroeconomic fundamentals underlying ASEAN's performance,
the conference revealed there was substantial support for the
view that the region's economies would remain strong in the
medium term, he said.
The upbeat view on the region's economic future was based on
the ability of the regional governments to maintain macroeconomic
stability, especially low inflation.
Soedradjad said that optimism on the region's
economic performance was also based on the fact that regional
governments were vigilant and well focused on keeping inflation
low and reducing current account deficits.
"While it bears emphasizing that these external deficits were
not viewed as unsustainable in the region, there was support for
reducing them in order to minimize risks arising from external
shocks or changes in investor sentiment," he told journalists
after the conference.
Several world-class financial and macroeconomic experts
addressed the conference, including IMF managing director Michael
Camdessus.
In his address, Camdessus warned ASEAN governments about their
high current account deficits and the soundness of their
financial systems.
Funds
Soedradjad said yesterday that vigilance, especially against a
massive rush of short-term funds, was increasingly difficult
because macroeconomic management had become more complex with
globalization.
"Nevertheless, a number of initiatives have been launched to
adapt monetary policy to the reality of financial liberalization,
to increase domestic savings even further in the private and
public sector," he said.
He said the conference stressed that the government's role in
maintaining macroeconomic stability was important.
"An important message has been that, while the size of the
public sector can, and indeed should, be reduced, the government
retains a critical role in maintaining an environment conducive
to high-quality growth," he said.
Maintaining macroeconomic stability and moving forcefully on
structural reforms are the key responsibilities of government's,
he said.
Several important subjects were discussed at the conference,
including sustaining the macroeconomic performance of the ASEAN
region, savings, investment, the current account and topics
related to monetary policy, financial liberalization and capital
market development. (hen)
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