Asean Moots Trade In Local Currencies

Visiting Malaysian prime minister Mahathir Mohamad said yesterday Thailand had agreed to his proposal that ASEAN countries trade among themselves in their local currencies as a way to overcome current problems.

He (Thai prime minister Chuan Leekpai) has agreed that we should do that but it will have to have some preliminary work before implementing it, he told reporters.

And for this, he will be sending his deputy prime minister (Supachai Panitchpakdi) to Malaysia to speak to my deputy, added the Malaysian premier, who leaves on Friday for Singapore.

Mahathir said he had come to Thailand as part of a swing through member countries of the Association of Southeast Asian Nations (ASEAN) to promote his idea of them using regional currencies to conduct trading among themselves.

 

ASEAN countries could use foreign currencies saved from such intra-trade in local currencies to purchase vitally needed goods from Europe and the United States, he added.

But separately, Thai premier Chuan said the Malaysian proposal was a good initiative, although a more thorough study of it was needed.

It is a good initiative, but we are not ready and more and thorough study needs to be done...like when we settle the debt, what kind of currencies need to be used, he told reporters.

There is no conclusion now on this matter. Thailand has assigned deputy prime minister Supachai to further study this...whether it contradicts the agreement we have with the International Monetary Fund, Chuan added. Thailand, unlike Malaysia, last August accepted a $17.2-billion multilateral International Monitory Fund bail-out package to beat a severe liquidity squeeze and is bound by some terms attached to the rescue package. The country is facing its worst economic crisis in decades.

On Thursday, the Thai Bankers Association said it supported Malaysias proposal, called the Association of Southeast Asian Nations payments system proposal, and the use of the strong Singapore dollar as a common currency for intra-regional trading. (Reuters)