NEWS - Asian Central Bankers Tight-

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Asian Central Bankers Tight-Lipped on Board Plan

               Reuters
               13-FEB-98

               NUSA DUA, Indonesia, Feb 13
               (Reuters) - Southeast Asian central
               bank officials attending the 33rd
               SEACEN governors conference in
               Bali were tight-lipped on Friday when
               asked about Indonesia's plans to
               adopt a currency board system. 

               ``I really can't talk about that,'' said
               one official, although others were a
               little more forthcoming. 

               One noted there was a difference
               between the conceiving a plan and
               implementing it. 

               ``The concept can and is being
               worked on and thought through,'' he
               said. ``The economics of the thing
               are the next thing to think about. 

               ``Timing and implementation follow
               the academic planning. The two don't
               usually come together,'' he added. 

               Questions were put to the central
               bank officials after a senior
               International Monetary Fund (IMF)
               official suggested in Washington that
               Indonesia was not ready for a
               currency board system, an inflexible
               regime with a fixed exchange rate
               under which a country only issues
               money when it has sufficient reserves
               to back it up. 

               ``We have concluded that a lot of
               options need to be in place before a
               currency board would make sense,''
               IMF First Deputy Managing Director
               Stanley Fischer told a luncheon
               seminar in Washington. ``I do not
               believe Indonesia is there at the
               moment.'' 

               Meanwhile, the Monetary Authority of
               Singapore (MAS) said on Friday it
               was up to Indonesia to decide what
               monetary system was best for the
               country. 

               ``The MAS position is that it's really a
               decision to be taken by Indonesia on
               what is the best monetary system for
               them,'' MAS assistant press officer
               Wong Nai Seng told Reuters. 

               The IMF last year led a $43 billion
               dollar bailout package for Indonesia
               in return for tough financial reforms
               after Asia's currency crisis sent the
               value of the rupiah plunging. 

               The rupiah again plunged in London
               and New York overnight as
               opposition mounted to the proposed
               currency board system. It was weak
               in early trade on Friday, opening at
               8,800/8,900 to the dollar, after a local
               close of 7,600/7,800 on Thursday. 

               The 10 members of the Southeast
               Asian Central Bank Governors
               conference (SEACEN) are Indonesia,
               Malaysia, Myanmar (Burma), Nepal,
               the Philippines, Singapore, South
               Korea, Sri Lanka, Taiwan and
               Thailand. 

               While the meeting is largely informal,
               the bank officials were expected to
               focus on the regional currency
               turmoil, Indonesia's proposal to adopt
               a currency board system, food price
               riots in Java and IMF bailouts of
               Thailand, Indonesia and South
               Korea. 

               Steve Hanke, who has been
               appointed special economic adviser
               to Indonesian President Suharto, was
               due to arrive in Jakarta this week to
               discuss plans for a currency board
               system. 

               Hanke told Reuters in Washington
               this week that he thought he could
               have a currency board system up and
               running within three weeks and
               talked of a pegged rate for the rupiah
               in the region of 5,000 per dollar. 

                  Copyright 1998