Thai PM: "Southeast Asia Should Consider Yuan For Trade"
DOW JONES NEWSWIRES, 0519 GMT Friday 12 November 2010.
BANGKOK (Dow Jones)--Southeast Asian nations should consider using the Chinese yuan for trade deals to help reduce the pressure on local currencies from a persistently weak dollar, Thai Prime Minister Abhisit Vejjaijiva said Friday.
Abhisit said he raised the issue during recent talks with the Asian Development Bank, which will help conduct a study on the feasibility of such a move.
He said the issue was also raised at the recent summit of leaders from the Association of Southeast Asian Nations, adding that the Group of 20 leaders have provided no progress on global currency worries because the U.S. and China have no clear strategy.
"What we should push forward is to encourage cooperation among" the Asean countries to minimize the damage arising from their strong currencies, Abhisit told reporters.
He also said he remains concerned about the strength of the Thai baht, which has gained around 11% against the greenback so far this year.
Thai authorities have already taken small steps to curb inflows and help exporters, who have become increasingly vocal about the impact of the strong baht on their businesses. The government reinstated a 15% withholding tax on gains from foreigners' investments in government-related bonds. The local currency, however, has continued to rise.
The government is now encouraging companies to take advantage of the baht's strength by accelerating investment plans which require substantial imports, thereby boosting capital outflows. Policy makers plan to work with the private sector to prepare an industrial investment strategy, although no concrete proposals have been announced.. =======================================================
Comment: Perhaps Australia should consider this as well, considering that China and Japan are by far our largest trading partners ?
