Finance ministers and central bank governors of Japan, China, South Korea, and the Association of Southeast Asian Nations (ASEAN) expressed concerns on Friday over the excessive exchange rate fluctuations caused by speculation. The meeting of the ASEAN Plus Three group in Tbilisi resulted in a joint statement highlighting the heightened volatility in the foreign exchange market as a risk to the regional economy.
Finance Minister Shunichi Suzuki emphasized the importance of stable exchange rates, stating that excessive movements are undesirable. The depreciation of currencies against the U.S. dollar has raised inflation concerns in Asian countries, with currencies like the Thai baht and Indonesian rupiah experiencing significant declines.
The Japanese yen also faced challenges, dropping to its weakest level in about 34 years against the dollar. Amidst these fluctuations, the possibility of foreign exchange intervention to stabilize the market was hinted at by Suzuki.
The ASEAN Plus Three group agreed to expand the Chiang Mai Initiative, a regional currency swap arrangement, and develop a framework for responding to emergencies like the spread of infectious diseases. Additionally, Japan and Pacific island nations discussed cooperation on climate change during the meeting.
Overall, the finance leaders underscored the need for stability in exchange rates and reiterated their commitment to addressing economic challenges in the region.
