Thu, Jan 13, 2005 - Page 10 News List

ECB official criticizes Asian currencies

BLOOMBERG

Asian currencies rose after a European Central Bank official suggested the region should stop trying to curb their appreciation.

The bank's chief economist Otmar Issing urged Asian governments to let their currencies strengthen to ease pressure on the euro, which rose almost twice as much as the South Korean won in the past three years.

"Asia is not doing its fair share," as Europe takes the brunt of the US dollar's decline, said Robert Rennie, a currency strategist at Westpac Banking Corp.

Issing's comments on Tuesday may have prompted some investors "to unwind" some of their dollar purchases because Asian currencies haven't risen as much, Sydney-based Rennie said.

The New Taiwan dollar yesterday rose 0.3 percent to NT$32.028 against its US counterpart, Taipei Forex Inc data show. The yen traded at ?103.38, near a one-week high of ?103.12 reached on Tuesday in New York.

The won climbed 0.3 percent to 1,042.20 against the US dollar as of 4pm in Seoul, according to Seoul Money Brokerage Services Ltd.

The won's 27 percent gain in the past three years lagged the euro's 52 percent climb versus the US dollar. The yen rose 28 percent and the NT dollar appreciated 10 percent in the same period.

The euro's advance has "gone too far," Issing said at a conference in Zurich. "The key to this problem lies with Asia and especially in the hands of China."

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