Malaysian PM calls for currency trade market
Malaysian PM calls for currency trade market
KUALA LUMPUR (AFP): Malaysian Prime Minister Mahathir Mohamad
yesterday called for a currency trade market to curb manipulation
and excessive speculation, taking another shot at American
financier George Soros in the process.
Mahathir said the establishment of a specific market for
currency trading was vital to ensure transparency and eliminate
any form of abuses in the trading system.
"We know that all trading have specific markets. There is a
place to sell shares as well as commodities, there is a place to
sell anything and traders must be registered," he was reported as
saying by Bernama news agency.
"But we find that in currency trading, there is no specific
market and we do not know who is trading," he added.
The premier said that the International Monetary Fund (IMF)
and the World Bank has been given Malaysia the mandate to
"undertake efforts towards introducing prudential regulations in
currency trading."
Malaysia will propose to the two organizations the
establishment of a currency trade market where "traders can
register themselves and get a seat number," he said.
"If they want to trade, they go there and we know who is
trading, where the money comes from, how much credit they get
from the bank," Mahathir said.
"We must know all this because only then can we trade. Here,
we trade with someone we do not know. He disappears just like
that like a ghost, then it is difficult," he added.
Mahathir said even forex traders themselves have acknowledged
that the current system was "hidden," with one trader reported to
have boasted that their movement could not be tracked because
"they act in secrecy."
He took another swipe at U.S. financier George Soros, accusing
him for practicing double standards with his involvement in
"hidden" currency trading on one hand and advocating for an open
society on the other.
"What sort of hidden trading is this when we hear Soros saying
that he fights for an open society but is himself involved in a
trading that is hidden, completely hidden?" he said.
Malaysia has blamed foreign funds, notably Soros, for
manipulating the ringgit and share prices on the Malaysian
bourse, both which had eroded more than 30 percent in value since
July.
Soros, who engaged in a war of words with Mahathir at last
month's IMF/World Bank meeting in Hong Kong, denies he is
personally responsible for the currency crisis and blamed
Mahathir for much of his country's woes.
Other regional currencies, such as the Thai baht, the
Philippines peso and the Indonesian rupiah have also been hit
hard.
Mahathir has urged the international community to outlaw
currency manipulation and has twice called for a ban on currency
trading, which immediately sent the ringgit plunging to record
lows.
Deputy Prime Minister Anwar Ibrahim had Monday said the IMF
would discuss Malaysia's proposal to regulate hedge fund
activities in Washington this week.
Anwar, who is also finance minister, said the IMF has
"accepted in principal" Malaysia's proposal aimed at protecting
developing nations from excessive manipulation and financial
abuses in the global market.
The proposal was made by Anwar and Mahathir during the IMF and
World Bank meetings in Hong Kong last month, after speculative
attacks on Southeast Asia's currencies.
The Washington-based IMF has guidelines for prudential
regulations and supervisions of banks but has none on hedge funds
and investment houses.
Hedge funds are international funds subscribed to by wealthy
individuals who aim for above-average returns by betting heavily
on global currencies, a move which could destabilize currency
markets.