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.