The Bank for International Settlements, the BIS, has said that Indonesia, South Korea and Thailand still face stiff economic. political and social costs of adjustment to the regional economic crisis.

In its quarterly report the BIS -- the central bank for the world's central banks -- warned that the ability of the three countries' exporters to benefit from currency depreciation may be limited because of the importance of intra-regional trade.

It said foreign banks had sharply reduced their loans to the region, and that China, Taiwan and Malaysia were also being deprived of foreign credit.

The report comes just days after Malaysia reported the first contraction in its economy for thirteen years.