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Economy
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2000-05-31 13:53:00-04
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New IMF Head Koehler supports Principle of Asian Money Fund
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Starting Asian tour in Bangkok, new IMF head endorses money fund in meeting with Thai PM
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New International Monetary Fund Managing Director Horst Koehler said Thursday that he was open to the development of an Asian monetary fund in principle as long as it would complement the IMF. Emerging from a meeting with Thai Prime Minister Chuan Leekpai, Koehler said, 'If it is complementary, why should it be such a big problem.' Koehler said he was in favor of the Chiang Mai initiative, an agreement reached between Asian countries in May to share their foreign reserves to combat future speculative attacks against their currencies. This type of attack unleashed the Asian financial crisis of 1997-98. He cited the Chiang Mai initiative as only a first step and the countries involved must work on the form such a fund would take. The currency-swapping idea and the Asian Monetary Fund concept have both been ideas that have been floated by the Japanese government. In previous floating of the ideas, they were shot down by the United States as undermining the discipline imposed by the IMF in granting financial aid. The Chiang Mai initiative is the most concrete step that has been taken in actually moving the currency-swapping arrangement forward. It will be of interest to see how Koehler presents this to the United States and what the reaction is.
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