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Asean Affairs  10  March 2011

Asian currency regime plan for Asia?

By  David Swartzentruber

AseanAffairs     10 March 2011

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A former Thai finance minister and former central bank governor, M.R. Pridiyathorn Devakul, said this week that an an Asian currency unit should be used as the benchmark currency for countries in the region if they want to efficiently cope with currency exchange fluctuation.

Speaking at a Wednesday seminar on "The Direction of the Thai Economy amid Fragility and Capital Flows," M.R. Pridiyathorn Devakul said he appreciated the Bank of Thailand's efforts to manage the currency exchange rate during the past five months, official media MCOT reported.

Its determination to cope with exchange rate volatility helped stop the speculation on the value of the baht, which made the currency more stable.

However, Thailand should study what China achieved in controlling the yuan by exchange rate targeting if it wants to control the Thai baht's movement in the long term.

He said it was unwise to allow the baht to float amid capital flows into Asia because it could make the currency fluctuate heavily.

The adoption of an Asian currency unit as the benchmark currency of the countries in the region is another efficient approach to curbing the currency exchange volatility because it could make currencies in Asia move in the same direction. Should all Asian countries cooperate to adopt that, it would help boost trade and investment in the region, he said.

A third option is to encourage Asian countries to adopt a single currency, but such an approach is impracticable because the economic and trade activities of the countries in the region are different in terms of value and volume, he said.

This potential plan is an idea that has been floating around Asia concurrent with the rise of the Chinese economy. But one wonders if Japan would go along with this plan given its historical relationship with China And what would be the reaction of another rising Asian economy, India?

These and more issues will have to be dealt with before the yuan becomes the backing currency in Asia.

Paul A. Ebeling, Jnr

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This year in Thailand-what next?

04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

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