Thai minister seeks curbs on currency speculation

Thai minister seeks curbs on currency speculation

WASHINGTON (Reuters): Thailand's Foreign Minister Surin
Pitsuwan urged the international community on Monday to come up
with ways to control currency speculation, warning that market-
opening reforms in developing nations were at stake.

"The world, I think, has an urgent need to come together and
look very, very carefully... into the negative impact of this
very, very volatile speculative activity," Surin said.

"If we can't come up with some agreement on that, then you
know what the negative impact is going to be. Every economy is
going to be very hesitant, very reserved, very concerned about
opening up, about liberalization," he told a news conference in
Washington.

At the beginning of this month, Malaysia's central bank
slapped curbs on foreign exchange trade to shield the battered
ringgit currency from global instability and cut off speculators,
long blamed by Prime Minister Mahathir Mohamad for Asia's
financial woes.

Malaysian policies have heightened concerns that other
developing nations, hit by financial crises in Asia and Russia,
would follow with tight controls of their own to shelter their
economies and currencies from the contagion.

International financier George Soros warned a U.S.
congressional panel last week that Mahathir put Asia's recovery
at risk and encouraged more flight of capital.

After Malaysia's announcement, Thailand made clear it saw no
need to impose additional capital controls to help its economy,
which is riding its worst economic crisis in decades.

Surin, during a trip to Washington, said confidence was
returning to Thai financial markets, with the help of an IMF-
arranged $17.2 billion rescue package agreed last year.

"Rather than withdrawing or closing down, or trying to adopt
measures that would be counterproductive, that would be
retrogressive, we have been determined to stay the course of free
market, of opening up," he said. "We are determined to do
whatever is expected of us to do."

But Surin said the IMF, the World Bank and major industrial
nations, scheduled to meet in Washington in early October, needed
to develop ways to "lessen the negative impact" of currency
speculation.

"Some mechanism of monitoring, of supervision, of control of
major movement of capital from one place to another...on the
basis of speculation, I think is in order," he said. "We do need
a very, very close international cooperation on this in order to
bring a semblance of order."

Without singling out Malaysia, Surin warned governments
against retreating from market-opening reforms.