[lbo-talk] Thai baht, Matahir and the Euro - a tale of two (possibly three) currencies

[kjkhoo at softhome.net]

At 8:38 AM -0700 16/10/03, boddhisatva wrote:
>    Back in the nineties I got it wrong, or at least I've reversed myself
>since then.  I thought and wrote that Matahir Mohamad was wrong to peg the
>ringit and limit capital flows....
>Practically, I knew that Malaysia would suffer from the rapid inflows and
>outflows of hot money but I felt that the Matahir represented the old,
>wrongheaded theory of national autarky.

Malaysia has always had a pegged currency, the difference being that 
earlier it was a managed peg to a basket of currencies whereas now it 
is pegged to the USD.

The radical difference was the de-monetization of the Malaysian 
currency outside its borders, and the capital controls.

There was never any thought of autarky. Whatever else Mahathir may 
be, he's also a supreme realist: a country where total trade was 
around 190% of GDP on the eve of the financial crisis, and is now 
around 230% of GDP would be foolish to think of autarky.

kj khoo