Malaysia Pm In Veiled Attack On Soros Over Currency Battle

Dr Mahathir Mohamad, Malaysias Prime Minister, has condemned a certain powerful American financier for politically motivated speculative attacks on south-east Asian currencies.

His statement, which left little doubt he was referring to George Soros, preceded a revelation on Tuesday that Malaysias central bank has paid heavily in its battle with speculators since early July.

Bank Negara, the central bank, announced that its foreign exchange reserves fell by 12.5 per cent from M$70.7 billion to M$61.9 billion (14.2 billion) in the 15 days to July 15.

Though it is unlikely that all of the funds were spent on defending the Malaysian dollar, previous estimates that the bank, which itself once had a reputation as a fearsome speculator, had spent about US$2 billion now appear too conservative.

 

Mahathirs attack was published in several Malaysian newspapers to coincide with his return on Tuesday from two months abroad. Are we sovereign nations? If we are sovereign nations, shouldnt we be able to protect what belongs to us? said Mahathir.

If they want to attack the British pound, by all means do so. Britain is rich. Malaysia is a poor country and it is not right for people like these to play and speculate with our currency.

The prime minister said the recent turmoil in regional currency markets may have been caused by a speculator who was opposed to south-east Asias engagement of Burma.

He described this as the agenda of a particular person who is patron of a foundation.

Soros, who contributed to forcing sterlings exit from the European exchange rate mechanism in 1992, is patron of a humanitarian foundation called the Open Society Institute, which established a Burma project in 1994.

Soros Fund management in New York said: The foundations founded and funded by Mr Soros play no role in the our investment decisions. See Lex Copyright Financial Times Limited 1997. All Rights Reserved.