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ASEAN
Currency Issue
July 31, 2007

Thailand to propose stability plan
Thailand will propose establishment of a mechanism to stabilise regional currencies -- which have become volatile in the past months -- during the Association of Southeast Asian Nations (ASEAN) foreign ministers meeting with their East Asian counterparts in Manila on July 31, Thai Foreign Minister Nitya Pibulsonggram was quoted as telling Thai News Agency, TNA.

Speaking to journalists while in the Philippine capital for the ASEAN event, Mr. Nitya said the proposal would be presented at a session of ASEAN+3, the ten member countries plus China, Japan and South Korea.

The three "plus" countries can contribute their cooperation on this issue, Mr. Nitya said. ASEAN plus the three East Asian nations have sufficient capital reserves and could come up with measures to protect volatility in regional currency in order to create confidence for investors and exporters, he said.
 
The working committee set up during the Chiangmai Initiative 10 years ago which was assigned to oversee the weakening of currencies then could be given the task although the situation is now different from before, he said.

Major capital inflows into Asia plus concerns over the sluggish US economy have created the volatility in regional currencies, including the Thai baht, in the past few months.

For instance, the Bank of Thailand's intervention policies in the currency market have already caused accounting losses of about 170 billion baht but produced little success as the baht continues to appreciate.

ASEAN's foreign ministers have agreed to establish a special fund which will be used to reduce a wide gap among the rich and the poor in the region, Mr. Nitya added. TNA

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