InfoAnda - SE Asia should 'de-dollarise', but slowly: experts

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

S.Korea ruling party pushes budget through | 1 January 2010
Report: Somalia Food Aid Diverted To Corrupt Contractors, Armed Groups | 11 March 2010
Oil prices bounce above $60 in New York | 20 May 2009

Apple still draws crowds in Asia with new iPhone 5 | | 21 September 2012

Forum Views () Forum Replies ()

Read more with google mobile : SE Asia should 'de-dollarise', but slowly: experts

Yahoo! My Yahoo! Mail More Yahoo! Services Account Options New User? Sign Up Sign In Help Yahoo! Search web search Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Singapore Asia Pacific World SE Asia should 'de-dollarise', but slowly: experts AFP - Sunday, October 17 Send IM Story Print SE Asia should 'de-dollarise', but slowly: experts Slideshow: Full Photo Coverage: Business & Economy PHNOM PENH (AFP) - – Southeast Asian countries that rely heavily on the dollar might be alarmed at its recent steep decline, but analysts warn against sudden moves to reduce their dependence on the greenback. In Cambodia, the dollar is far more prevalent than the riel, the local currency, while neighbouring communist-run Laos sees shoppers paying for goods in kip, dollars or even Thai baht. In communist Vietnam, the local dong is popular enough, but dollars still account for 20 percent of all currency in circulation there. And in Myanmar (Burma) a volatile domestic currency has left locals distrustful of the kyat. "Not a single Burmese person I have ever met has savings in the local currency," said Myanmar economics expert Sean Turnell from Australia's Macquarie University. Such heavy reliance on the greenback is known as "dollarisation" and reflects "a general lack of confidence in the local currency", said Jayant Menon, principal economist at the Asian Development Bank (ADB). The dollar has fallen sharply in recent weeks, but analysts say the US currency's woes are unlikely to immediately affect the use of domestic currencies much in these Asian nations. It might, however, influence the way people in these countries save or store wealth. "In Vietnam it could result in a greater switch to gold. In Laos, a move to baht," said Menon. "The long-term objective for these countries should be to de-dollarise," said the economist, who has co-authored a new book about dollarisation in Cambodia, Laos and Vietnam. But reducing reliance on the greenback can only work if governments address the underlying problems that caused the shift in the first place, he said, and for now the dollar is still "a safer bet". Reliance on the dollar has benefits -- it can bring stability to an otherwise volatile market and makes it more difficult for governments to simply print money to make up for budget shortfalls, according to experts. But it also limits the power of central banks to control the money supply or determine exchange rate policies. "Before the global financial crisis, a lot of these countries, especially Cambodia and Vietnam, had inflation building up and central banks couldn't do much in terms of mopping up the extra liquidity to try and keep inflation in check," said Menon. "In a funny way, the global crisis was a bit of a blessing when it comes to controlling inflation because demand fell off sharply and these countries were then able to control inflation." Another downside to dollarisation is that these countries lose out on seigniorage -- the revenue accrued when the cost of printing money is lower than the face value of that money. The ADB estimates that Cambodia, Laos and Vietnam miss out on 20 to 90 million dollars a year this way, with impoverished Cambodia being the biggest loser. That income instead goes to the United States, where the money is printed. But Hang Chuon Naron, secretary general of the Cambodian government's Supreme National Economic Council, defended his country's reliance on the US currency. "Because of dollarisation, people are not scared to put money in the bank," he said. "And it imposes discipline on the government." Still, while "de-dollarisation" -- moving away from the greenback -- is not a priority, Hang Chuon Naron said he can see a time when the riel will be the dominant currency in Cambodia. "The issue is to accumulate national reserves, and promote a high growth rate and long-term confidence. We have to do this step by step." Menon said he agreed with a long-term approach to reducing dependence on the greenback. "If governments try to change the system overnight, by requiring the use of domestic currency, the experience is that it's actually counterproductive and delays further the process of de-dollarisation," he said. But there are shorter-term measures available to governments to lessen their dollar reliance. In Cambodia, for instance, the government "could try to increase the incentive for people to save in the domestic currency", Menon suggested, or some private-sector wages could be paid in riel. In the medium term, Menon said all these countries could benefit from a Currency Board Arrangement -- a pegged exchange-rate system, where countries can only issue currency that is fully backed by foreign exchange reserves. "Long term, it's about improving institutions, financial markets, capital markets, political and economic stability," he said. Recommend Send IM Story Print Related Articles US-BUSINESS Summary Reuters - 23 minutes ago BHP and Rio seek merger exit without break fee: report Reuters - 24 minutes ago BHP, Rio seek merger exit without break fee -paper Reuters - 31 minutes ago Yemeni planes bomb al Qaeda in south after ambush Reuters - 43 minutes ago Arabtec sees 2010 revenue of $1.5-1.7 bln - CEO Reuters - 1 hour 4 minutes ago News Search Top Stories Cuts will haul UK back from edge: finance minister Blonde or brunette? Celluloid rivals fight it out China battles to rescue trapped miners German police evict protestors in station siege Iranian chocolate thief 'to have hand chopped off' More Top Stories » Related Full Coverage China Economychina economy All Full Coverage » ADVERTISEMENT Most Popular Most Viewed Most Recommended World's longest tunnel breaks down Swiss Alpine barrier NESV seal acrimonious Liverpool takeover Iranian chocolate thief 'to have hand chopped off' Time, like all good things, may come to an end: study World's longest cable car line opens to Armenia More Most Viewed » Too much TV psychologically harms kids: study British lottery winner gets record 129 mln euros Workers swarm Europe's streets in anti-cuts protests 'A billion people' go hungry in 2010: report Global marine life census charts vast world beneath the seas More Most Recommended » Elsewhere on Yahoo! Financial news on Yahoo! Finance Stars and latest movies Best travel destinations More on Yahoo! News Home Singapore Asia Pacific World Business Entertainment Sports Technology Weekend Edition Subscribe to our news feeds Top StoriesMy Yahoo!RSS » More news feeds | What are news feeds? Also on Yahoo! Answers Groups Mail Messenger Mobile Travel Finance Movies Sports Games » All Yahoo! Services Site Highlights Singapore Full Coverage Most Popular Entertainment Photos Yahoo! News Network Copyright © 2010 Yahoo! Southeast Asia Pte Ltd. (Co. Reg. No. 199700735D). All Rights Reserved. Privacy Policy - Terms of Service - Community - Intellectual Property Rights Policy - Help

Other News on Sunday, 17 October 2010
Blasts hit southern Afghan city, at least one dead |
EU lacks vision on Turkey membership: Gul
Herat 'may be handed to Afghans by 2011'
Iranian chocolate thief 'to have hand chopped off'
Karzai: Afghan peace council is hope for future
World's longest cable car line opens to Armenia
Rescuers hunt for trapped Ecuadorean miners |
Seven Iraqis arrested in September army base attack |
N.Korea 'ready' to resume nuclear disarmament talks
Japan rallies against China over disputed islands
Indian Muslims to appeal disputed holy site ruling
Alicia Keys gives birth to baby boy
China media mostly quiet as mine blast traps 16
Germany to help Japan obtain vital rare earths
China calls US green-tech trade charges 'groundless'
New date sought for Paris peace summit
Britons trust ministers on cuts, expect unfairness
Six killed in gun attack in Mexican border city |
Seven Iraqis arrested in September army base attack
Philippines braces as Megi becomes super typhoon |
Blonde or brunette? Celluloid rivals fight it out
Basque separatist says ETA should declare 'permanent truce'
China urges anti-Japan protesters to stay within law |
Attacks hit Kandahar, killing 2 Afghan civilians
Some of Chile's 33 to return to mine for ceremony |
German police evict protestors in station siege
China battles to rescue trapped miners
German bid at multi-cultural society has failed: Merkel
Voting starts in Pakistan's Karachi after violence |
Bomb hits Kandahar city police HQ; 1 Afghan dead
New date sought for Paris peace summit: Israel |
Israeli air strike kills militant in Gaza Strip |
Tens of thousands rally against Italian government
Jolie to get back licence to film in Bosnia: local producer
Philippines braces as Megi becomes super typhoon
China urges anti-Japan protesters to stay within law
Vietnamese sailors located after China release
Gates: No sensitive info in Wikileaks Afghan papers |
10 die in Indian temple stampede
Stoner scorches to fourth straight Aussie MotoGP win
At least 17 people killed in Pakistan's Karachi
Russian Arctic's 'nuclear dump' gets a facelift
Insurance fraudsters target North Korean refugees
Hope fades for 11 trapped miners in China
Blonde or brunette? Celluloid rivals fight it out in Paris
Hobbit row 'threatens' NZealand film industry
Australian police probe Gitmo detainee book deal
Festival stampede at north Indian temple kills 10
US-ENTERTAINMENT Summary
"Leave It to Beaver" mom Barbara Billingsley dies
Crocheted coral exhibit carries environmental warning
Jolie to get back licence to film in Bosnia: local producer
Leave It to Beaver mom Barbara Billingsley dies |
US-TECH Summary
Gates: No sensitive info in Wikileaks Afghan papers
'Fallout: New Vegas' takes post-apocalypse play to Sin City
Afghan reprieve for some private security firms
Merkel says German multi-cultural society 'has failed'
Ahmadinejad says world has no option but talks
American held in Iran for 30 months says to sue group |
Sarkozy, French unions fight to finish on pensions |
Israeli air strike kills 2 militants in Gaza Strip
Off-Duty Baltimore Police Officer Killed After Argument Over Parking Space
Afghan 2010 troop death toll reaches 593
Yemeni planes bomb al Qaeda in south after ambush |
NATO service member killed in southern Afghanistan
Pope makes saint of nun who exposed sexual abuse |
American freed in Iran says he is innocent
Thai red shirts rally to demand leaders be freed |
Iran warns domestic media over opposition news |
Nine missing Vietnamese fishermen found adrift |
Somali pirates seize S.Korean fishing boat
Thai PM faces court as ban threat hangs over party
Minimum and maximum temperatures in Celsius
Super typhoon only hours away from Philippines
Discovery of GPS tracker becomes privacy issue
Taiwan bourse 'says 61 foreign firms want to list'
APEC ministers warn food security at 'crossroads'
India launches diamond bourse
OPEC caught in dollar crossfire
India's 'King Coal' sale to raise billions
SE Asia should 'de-dollarise', but slowly: experts
Wall of money leaves Asia swimming against tide
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph	VPN on MacOSX	BlogMeter 1.01