April 05, 2002
Asian Monetary Fund Difficult Anytime Soon, Says Japan
Yangon, April 4: An Asian Monetary Fund remains some way off given the different stages of development of countries in the region, a senior Japanese financial official said on Thursday. Deputy director-general of Japan's ministry of finance Hiroshi Watanabe said a programme of bilateral currency swaps now underway led by Japan was "compensating" to IMF-style funding and should be expanded. "It's a little bit far away," he said ahead of a meeting of East Asian finance ministers and senior finance officials in Yangon. "May be it's kind of some target, but within one or two years it is very difficult to have that," he said when asked about an Asian Monetary Fund. "Still the level of economic stages is quite different. "It's quite different from the European area, so in order to have some kind of multilateral institution, it will take some time. First of all we need a much more closer, dense network of bilateral swap arrangements." Some proponents of currency swaps see them as precursor to an Asian Monetary Fund, a prospect that makes some Western nations uneasy. Mr Watanabe said Japan had already agreed five swap arrangements and another two were in the pipeline, while China and South Korea were following suit with their own arrangements with other Asian countries. Japan has already signed bilateral swap deals with China worth $3 billion, South Korea $2 billion, Thailand $3 billion, the Philippines $3 billion and Malaysia $1 billion. China and Thailand also have a $2-billion arrangement and Korea is discussing deals with China, Malaysia, the Philippines and Thailand. A China-Philippines deal is being negotiated. The swap deals are aimed at providing rapid help if a country's currency comes under speculative attack. But analysts say the amounts involved remain largely ineffectual and the agreements mean little in practice given that most regional currencies are now floating, making a repeat of the 1997 financial meltdown unlikely. (Reuters)
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