Asean Seeks Currency Stability

Finance officials of the Association of South East Asian Nations said that they would prefer less volatile foreign exchange rates, and Malaysia added it was concerned with the yen's rapid rise against the dollar.

In a meeting with Japanese finance minister Hiroshi Mitsuzuka, finance ministers of Indonesia, Thailand, the Philippines and the Malaysian finance ministry's secretary general said they were concerned at recent currency movements.

We are concerned with the movement in foreign exchange rates, Thai finance minister Amnuay Viravan told Mitsuzuka.

Philippine Finance Secretary Roberto de Ocampo agreed and Malaysia's Clifford Herbert said there should not be a too rapid rise in the yen against the dollar.

 

Japanese officials said Mitsuzuka gave no specific reply to Asean officials during a meeting on the sidelines of the 30th annual Asian Development Bank gathering.

The yen has risen sharply against the dollar in recent days, about six yen in the past week, to just below 120 to the dollar, on perceptions of a narrowing of U.S. and Japanese interest rates.

Asian currencies are loosely pegged to the U.S. dollar but some have recently shown strong synchronisation with the yen.

A stronger yen means Asian exports become cheaper and more competitive against Japanese rivals, but only if they can keep their own currencies from rising against the dollar.

Many ASEAN nations, such as Malaysia, also receive yen loans from Japan's Official Development Assistance, and volatility in the yen makes it hard for it to plan its interest payments, Japanese officials said.

They said they had received similar calls for stability from ASEAN countries when the yen neared 80 to the dollar a couple of years ago.

But they added that none of the ministers mentioned specific levels for the dollar/yen at their meeting.