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Call for Asian

currency regime

KUALA LUMPUR: Eisuke Sakakibara has called for an Asian currency regime to be developed to stabilise exchange rates in the region.

Sakibara, Japanese vice finance minister until September last year and now a professor at Keio University, said in remarks published Wednesday that Asian countries were currently operating based on the US dollar.

"We need a cooperative regime among Asian currencies Ñ ringgit/yen, won/yen and yen/baht and so on," he said in an interview with the New Straits Times daily newspaper.

"It may take time but it is absolutely necessary at least in the medium term. Some sort of a unification of currencies might be difficult but we could start with something like an Asian currency unit".

Sakakibara said Japan was slowly recovering after the economy hit bottom in the first quarter of 1998 but it needed to stabilise the yen/dollar rate. "There is need for joint intervention by the US and Japan to stabilise the currencies. Further appreciation of the yen, seen from the reverse side, is a weakening of the dollar," he said.

"I don't think (a weak dollar) is desirable for the US because it is receiving a huge amount of money from the rest of the world. It needs one billion dollars a day in order to compensate for its current account deficit. He said that there were already "some bubble elements" in the US stock market.

"If the bubble bursts, that would really affect the world economy negatively and we have to avoid that. There is a need for a stable exchange rate," he added.ÑAFP