Trump chickens out again.

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Ex-BoT chief backs Asian currency regime adoption

BANGKOK, Mar 9 – An Asian currency unit should be used as the benchmark currency of the countries in the region if they want to efficiently cope with currency exchange fluctuation, according to former deputy prime minister and finance minister Pridiyathorn Devakula.

Speaking at a seminar on “The Direction of the Thai Economy Amid Fragility and Capital Flows,” the former central bank governor said he appreciated the Bank of Thailand's efforts to manage the currency exchange rate during the past five months.

Its determination to cope with exchange rate volatility helped stop the speculation on the value of the baht, which made the currency become more stable.

However, Thailand should study what China achieved in controlling the yuan by exchange rate targeting if it wants to control the baht's movement in the long run.

He said it was unwise to allow the baht to float amid capital flows into Asia because it could make the currency fluctuate heavily.

The adoption of an Asian currency unit as the benchmark currency of the countries in the region is another efficient approach to curbing the currency exchange volatility because it could make currencies in Asia move in the same direction.

Should all Asian countries cooperate to do that, it would help boost trade and investment in the region, he said.

A third option is to encourage Asian countries to adopt a single currency, but such as approach is impracticable because the economic and trade activities of the countries in the region are different in terms of value and volume, said Mr Pridiyathorn. (MCOT online news)

-- TNA 2011-03-09