SINGAPORE, May 27: Asian central banks stepped up efforts on Friday aimed at coordinating their currency policies and stamping out sharp fluctuations in exchange rates to promote investment, growth and trade within the region.
Central bank chiefs of Japan, China and South Korea, who oversee the world’s biggest foreign exchange reserves, met in Seoul at a conference where they signed bilateral credit swap agreements. Their counterparts from Indonesia, Singapore and Thailand came together at a forum in Singapore.
Bank of Thailand Governor Pridiyathorn Devakula said he did not want to talk about the final structure of cooperation discussed among the region’s central banks. But he said a move was afoot to orchestrate the region’s currency regimes and ensure that their exchange rates moved within a set range to promote regional stability and growth.
Managed float is the norm in Asia — we have the baskets, we have the bands, Pridiyathorn said at the forum in Singapore, referring to the region’s managed currency regimes.
Everyone has the same concept. Based on that concept ... we can structure and stabilize the currencies in the region enough to support inter-regional growth. The meetings of Asian monetary authorities have gained urgency as China has come under increased pressure from the United States and Europe to relax its tight control over the yuan and let it trade more freely.
Other Asian central banks are also under pressure to end intervention in the foreign exchange markets and let their currencies appreciate against the dollar and euro to help solve global imbalances caused by the US current account deficit. — Reuters
