SE Asia told to ease dependence on dollar

SE Asia told to ease dependence on dollar

KUALA LUMPUR (AFP): A Southeast Asian private-sector business
alliance said yesterday that regional economies should reduce
their dependence on the U.S. dollar in the wake of regional
currency turmoil.

"For the longer-term, Southeast Asia should consider reducing
dependence on the dollar and diversifying into currencies that
are a more objective and less volatile store of value," said the
Malaysian-based ASEAN Business Forum in a statement here.

It said Southeast Asia should consider diversifying into
currencies that are less volatile and, within the region,
cooperate with Japan in terms if yen asset holdings.

"In the medium term, regional economies should welcome the
introduction of the euro in 1999 as a viable alternative to the
dollar as its inclusion in national foreign exchange reserves
will reduce currency volatility," the private business grouping
made up of leading ASEAN businessmen said.

Regional currencies have fallen by from 10 percent to 60
percent against the dollar since the Thai baht's devaluation
against the US unit on July 2.

A senior French official also urged Southeast Asian economies
Friday to peg their currencies to the new euro currency.

"It will mark the end of the dollar monopoly. We are not
against our US friends. We will be able to build a new stable
economy," said Jean-Daniel Tordjman, special representative of
France for international investment.

The European Union plans to launch the euro as the single
currency for most EU members on January 1, 1999.

The ASEAN Business Forum said currency stabilization efforts
had only a limited effect. "Often this happens too little, too
late and there is a redistribution of wealth from government to
private financial market players, " it said.