ASEAN Plus 3 Share Concerns About Excessive Exchange Rate Fluctuation; Seeking Stability in Exchange Rate
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Finance Minister Shunichi Suzuki speaks at a press conference in Tbilisi on Friday.
14:07 JST, May 5, 2024
TBILISI — Japan, China, South Korea and the Association of Southeast Asian Nations shared concerns Friday about excessive exchange rate fluctuations caused by speculation amid the continued depreciation of their respective currencies against the U.S. dollar in the foreign exchange market.
The ASEAN Plus Three group held a meeting of their finance ministers and central bank governors in Tbilisi and adopted a joint statement that included “heightened foreign exchange market volatility” as a risk to the regional economy
Speaking at a press conference, Finance Minister Shunichi Suzuki emphasized that it is desirable for exchange rates to move stably. “Excessive moves are undesirable,” he said.
Concerns about inflation are increasing in Asian countries as their currencies weaken. The Thai baht has fallen more than 7% against the dollar since the beginning of the year. The Indonesian rupiah has also declined 5%, and the Indonesian central bank raised interest rates for the first time in six months in April.
The yen also temporarily dropped to the lower ¥160 range against the dollar on April 29, its weakest level in about 34 years.
The yen then immediately soared to the ¥154 level. On Thursday, the yen appreciated from the ¥157 level to the ¥153 range in less than an hour.
The yen was at the upper ¥152 level against the dollar when the New York market closed Friday, but it continued to fluctuate and hit the upper ¥151 range. Regarding the possibility of foreign exchange intervention by the Japanese government and the Bank of Japan to buy the yen and sell the dollar, Suzuki said that he would not comment. But, he said, “When there are excessive moves, it may be necessary to ‘smooth them out.’”
At the meeting, the ASEAN Plus Three group formally agreed to expand the Chiang Mai Initiative, a regional currency swap arrangement set up in preparation for a currency crisis, and to create a framework for responding to emergencies such as the spread of infectious diseases.
The finance ministers of Japan and Pacific island nations also met for the first time and agreed to cooperate on climate change, among other issues.
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