Nine Asian nations vow to stabilize their currencies

Nine Asian nations vow to stabilize their currencies

BANGKOK (Agencies): Top officials from nine Asian central
banks agreed at a meeting here on Saturday to strengthen
cooperation to maintain the stability of regional currencies, a
Thai central bank official told Reuters yesterday.

"After exchanging views on the recent volatility in the
foreign exchange markets, we jointly agreed to strengthen our
cooperation to maintain the stability of currencies in the
region," said a Bank of Thailand senior official.

Speculators drove the baht to a 10-and-a-half year low of
26.50 to the dollar 10 days ago before Southeast Asian central
banks intervened. The Bank of Thailand fixed the official mid-
rate Friday at 25.79 to the dollar.

The Bank of Thailand in a separate statement yesterday said
the top Asian monetary officials gathered here as part of the
regular meeting of Executives' Meeting of East Asia and Pacific
(EMEAP) Central Banks.

The meeting, which was held without publicity, included senior
central bankers and top monetary officials from Japan, Singapore,
Malaysia, Australia, South Korea, Indonesia, China, Hong Kong and
Thailand, the official said.

In a related development, Thai Prime Minister Chaowalit
Yongchaiyudh led top economic officials at an urgent meeting with
some 100 business leaders in Pattaya yesterday to discuss
measures to boost exports.

Commerce Minister Narongchai Akrasanee told reporters that the
government had called an urgent "export summit" to inform
exporters of existing and planned measures and to hear proposals
from the private sector.

After a decade in which gross domestic product (GDP) growth
averaged 8.0 percent to 9.0 percent, exports collapsed from a
23.6 percent growth in 1995 to a decline of 0.1 percent last
year.

Analysts see a recovery in exports as crucial to domestic and
international confidence, affecting investment and the baht
currency.

Local newspapers said Sunday that the authorities planned to
reveal measures to control corruption in the customs department.

The country is going through an adjustment in the structure of
its exports as it becomes less competitive in low-wage sectors.

Narongchai said he would remind exporters that they first had
to help themselves and cooperate with the government, and not
wait for the government to save them.

Viroj Amatakhunchai, chairman of a local textile producers
association, said the biggest problem facing exporters during the
current economic slowdown was cashflow.

The most important step the government could take would be to
speed up the Excise Department's processing of value-added tax
(VAT) refunds to exporters, he said.

"Problems with VAT refunds affect the cost of production and
the ability to compete. If the government solves this problem it
could boost the export industry immediately," Viroj said.

Refunds to most exporters are only received after five months,
an improvement on eight-to-nine months in the recent past, but
not good enough, he said.

Cashflow was also very tight because commercial banks were
refusing to extend additional loans for working capital, he said.