Chungwoo: Asian Central Banks Plot Intervention

Asian currencies, with the exception of the Chinese Yuan and
Japanese Yen, have notched stellar performances this year. The currencies of Thailand, Malaysia,
Singapore, South Korea, to name but a few, have experienced double-digit
increases (in percentage terms) against the Dollar. Worried about the impact of a rising currency
on export growth, Asian central banks are in the process of intervening in
forex markets. Singapore,
which uses currency manipulation as a form of monetary policy, believed to have
already made purchases of US government bonds in order to depress the Singapore
Dollar. South Korea, as well, has a history
of forex intervention, albeit unsuccessful intervention, and may issue currency
stabilization bonds before year-end. The
Gulf Daily News reports:



The Bank of Korea has repeatedly stated that it would
closely monitor currency markets, expressing concern about the level of the won
and money supply growth.



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