Asian Bankers To Study Money Plan
NUSA DUA, Indonesia (AP) _ The heads of five Southeast Asian central banks said today they will study the possibility of trading with each other in local currencies to ease dependence on the dollar.
A task force will meet in Kuala Lumpur, Malaysia at the end of this month to assess the idea, according to a statement released by the bankers at an annual summit.
Indonesia, Malaysia, Singapore, Thailand and the Philippines will debate the proposal, put forth last year by Malaysian Prime Minister Mahathir Mohamad. The countries are members of the Association of Southeast Asian Nations, a regional trade bloc.
With their economies battered by currency turmoil, the region’s financial leaders have been casting about for ways to overcome a crisis that has pushed up prices and unemployment.
At the summit on the island of Bali, Indonesia’s central bank chief also said the International Monetary Fund was more willing to be flexible with its economic rescue plans. The IMF has been accused of being too strict in Asia.
The IMF has put together a total of $100 billion in emergency loans for Thailand, Indonesia and South Korea, which have suffered sharp drops in their currencies since last year.
The strings attached to the loans, including tough austerity measures, have deepened the financial pain and criticism of the IMF is growing. In Indonesia, violent protests have broken out in at least 20 towns over higher food prices.
In Washington, IMF Managing Director Michel Camdessus defended his agency’s methods on Friday. He said they are meant to restore market confidence by dealing with problems specific to each nation.
But Camdessus voiced doubts about a proposal being considered by Indonesia to tie its currency to the dollar as a way of stabilizing chaotic currency markets.