Thailand to propose setting up of an Asian IMF

Thailand currently chairs the Association of South East Asian Nations. The nation is planning to propose setting up a regional financial institution for Asia that would be a cross between the International Monetary Fund and the World Bank.

“The first step would be a kind of Asian IMF, so if we are in trouble we could get some help from this multilateral organisation,” said the finance minister Suchart Thadathamrongvech. “Then if the situation is not in crisis, it would have money in the system and it could act as a kind of development bank, like the World Bank.”

Olarn Chaipravat, the deputy prime minister, has also suggested that the Asian nations should pool 10 per cent of their foreign exchange holdings into a superfund that could protect the region from the global turmoil fallout. This would amount to about $350bn, (€272bn, £217bn) with the lion’s share being provided by China, which has reserves of about $1,900bn, and Japan, with reserves of $1,000bn.

However, Mr Suchart said that the negotiations are at a very early stage and it is doubtful whether China and Japan would agree to part with their reserves for this plan.