[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 22 January 2007, 07:24 GMT
Asian heads stress currency risk
Japanese shoppers
Globalisation has led to capital inflows into Asia
Asian central bankers have warned against the destabilising impact of capital inflows and unstable currencies in the region.

Bank of Japan governor Toshihiko Fukui said keeping foreign exchange rates stable would be one of the hardest tasks for monetary authorities.

Others warned that volatile exchange rates could harm imports and exports.

But leaders - at a symposium to mark 10 years since the Asian financial crisis - said market conditions had improved.

Monetary policy

"The foreign exchange and financial markets are much more stable and the currencies sometimes face upward rather than downward pressure," said Mr Fukui, at the event which was hosted by the Bank of Japan.

But he added that as a result of the globalisation of the world's financial markets, large capital flows would keep influencing open economies.

"It is, and will surely be, the most difficult task for any monetary authorities to maintain the stability of foreign exchange rates, the free flow of capital, and the independence of monetary policy simultaneously," Mr Fukui said.

Thailand's central bank governor, Tarisa Watanagase, said the key for its economy to grow would be by preventing the Thai baht from becoming too strong against other currencies.

A recent influx of capital to Thailand prompted a rise in the baht that was "detrimental to competition", said the bank's governor.

Meanwhile, a decision by Thailand's newly installed interim government to restrict ownership by foreigners of Thai companies has raised worries and destabilised the baht.

To prevent capital inflows from destabilising the region, International Monetary Fund chief Rodrigo Rato suggested that more could be done by making Asia's financial systems stronger and integrating the region's financial systems better.




SEE ALSO
No alteration in Japanese rates
18 Jan 07 |  Business
Thailand rate cut to spur growth
17 Jan 07 |  Business
Thai stocks fall after bombings
03 Jan 07 |  Business
Japan sees further recovery signs
15 Jan 07 |  Business
Japanese economy suddenly slows
08 Dec 06 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific