Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PCW - Pacific Century CyberWorks Limited -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (65)	1/14/2001 2:28:38 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Japan, France urge Asia to downgrade dollar KOBE, Japan, Jan 14 (AFP) - Japan and France on Sunday urged Asia to include the euro and yen in a new post-crisis currency regime, arguing the excessive reliance on the dollar had brought disaster. But crisis-hit Asian countries attending the Asia-Europe Meeting (ASEM) gathering here said proposals for a yen-based basket of currencies to be adopted as a trading target went too far. And the United States would have to be consulted before a new international currency regime could be implemented for Asia to prevent a repetition of the 1997 financial crisis, participants said. Japan and France said the free flotations of currencies seen in most of East Asia since the crisis were inappropriate, as they could encourage countries to embark on competitive devaluations. A managed float, including broad targets for the exchange rate, would be preferable for economic stability and the spirit of regional cooperation, France and Japan recommended, according to an official at ASEM. The question of which reference currency to include in the basket as a trading target was crucial, the countries said. "East Asian countries have trade and capital patterns that are already geographically diversified," they said in a study submitted to ASEM, according to the official. "As the Asian crisis has proved, it would be quite unsuitable to choose the US dollar as the sole reference currency," France and Japan argued. "Basket currency regimes including the dollar, the yen and the euro would better suit the geographical structure of the balance of payments and would foster stability," they said. But with the International Monetary Fund (IMF) urging crisis-hit Asian nations to continue with freely floating currencies, Indonesia and Malaysia insisted on the right to have foreign-exchange regimes suitable to their own needs. Asked if Indonesia backed proposals for a currency basket, Finance Minister Prijadi Praptosuhardjo told AFP: "No, no. Each country has a certain regime for exchange rates. They can do what they want. "So, we just learnt from the (Franco-Japanese) study," he said. Malaysia, which responded to the crisis by isolating its economy through capital controls, also had reservations, first deputy finance minister Shafie Mohamad Salleh said. "Japan goes a little bit further (on) a basket of currencies," he told AFP. "For us, a basket of currencies is quite problematic, because you have to adjust all the currencies." The free-falling Japanese yen has loomed large over the ASEM debate on what kind of currency system is best suited to avoid a repetition of the 1997 market panic, which brought years of rapid growth in East Asia shuddering to a halt. The yen has slid to its lowest levels against the dollar since July 1999, reviving memories of the extreme volatility in the yen-dollar rate that preceded the crash of the Thai baht in July 1997. Most East Asian currencies at the time were fixed in a peg against the dollar, but are now free-floating. Japanese proposals in the crisis aftermath for an Asian Monetary Fund to be created met short shrift in Washington, with US Treasury Secretary Lawrence Summers insisting on the centrality of the IMF. Etienne Reuter, the European Commission's chief spokesman in Japan, said the Franco-Japanese proposal was merely for discussion. "The idea has already been circulating, but it's relevant to note that the US are not here" at ASEM, he told reporters. "The new administration is not yet in place," he added. "Some people might speculate the Republican administration would be more interested than maybe what Larry Summers was in those ideas, but it is too early to say." -------------------------------------------------------------------------------- asia.dailynews.yahoo.com