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To: Alex who wrote (13972)	6/30/1998 2:47:00 AM
From: Alex	Respond to of 116796

U.S. to intervene in forex market when appropriate BANGKOK, June 30 (Reuters) - Treasury Secretary Robert Rubin said on Tuesday the United States would intervene in the foreign exchange markets if and when it felt it was appropriate to do so. He also told a news conference that Washington's attempt to boost the yen two weeks ago had been constructive. ''We intervene when it is appropriate and we don't intervene when it is not appropriate,'' he said. On the recent intervention on behalf of the yen, Rubin said: ''We felt that was appropriate. I believe it was a very constructive thing to do.'' Rubin's comments on intervention and talk of a permanent tax cut in Japan dragged the dollar down against the yen. The U.S. official also said that speculators were not the principal cause of the currency crisis which hit Asia recently. ''The judgement at this point would be that there is sufficient data available, and one can study the history of this era, that the role of speculating can be found to be incredibly small,'' he said. ''There might be a period of days or even longer than a period of days where speculative activity has played a significant role. But I do not think it has been principally or centrally involved in what's happened in the currencies in these areas,'' Rubin added. ''Should there be some look at restraints on short term capital outflows? I would be inclined, speaking for myself, to lean against it (as a policy),'' he said. Such restraints might tend to divert attention away from the real problems of any economy and tended to increase the cost of capital in countries, Rubin said. The Treasury Secretary reiterated his defence of the high interest rates approach aimed at restoring confidence in battered Asian currencies. ''Its very tempting to say let's have lower interest rates and thereby make it easier to conduct business. But the problem is that, if as a consequence, you have a seriously weaker currency, you create all sorts of other problems for yourself,'' he added. ''Its not an easy path to have a firm interest rate regime, but it is the most effective path.'' Rubin said he was confident the Asian region would regain its former dynamism in the long run, once it had sorted out its economic problems. But he warned this process would take time. ''People are understandably worried. I think they should be worried. It is not going to get better quickly.'' biz.yahoo.com