Jamie Lyn Duque
Filipino
Legislative Staff Officer
Senate of the Philippines

This is a normative answer. Of course, I would advise that Asian central banks should leave the exchange rate market alone, especially if the central bank has exchange rate reserves constraints. Because if say, in the Philippines, we have low dollar reserves, it would not be sustainable to interfere in the exchange rate. But that’s just an opinion, others would disagree, there are different factions, advocates of fixed or flexible.
But we have sizeable dollar reserves, so we might afford “interfering”. But personally, it’s better to let our currency appreciate because it lowers the value of our foreign debts which has a greater effect compared to export competitiveness.

Demetrio Innocenti
Italian
Southeast Asia Area Coordinator
CMC di Ravenna (Asia), Inc.

To my mind, the question should be “How much are the Asian governments able to control their currencies to stay competitive?” The US and EU easily control their fiscal policies and the interest rate on their currencies, many Asian countries, instead, are still heavily dependent on foreign investments and this has a significant influence when it comes to economic-fiscal policies.

The recent case of Thailand showed how a strong SE Asian economy can be extremely vulnerable to foreign investors’ decisions. In the case of the Philippines I would say fiscal policies are well done, the economy is going well and most probably the value of the peso has the right level of appreciation against the dollar. However, if the peso is going too strong against the US dollar, something can be lost in terms of economic growth since most of the remittances are still in US dollars and economic links with the US are relevant for the Philippines.

Michael Hojbjerg
Danish
General Manager
ScandWood

It’s a question of devaluating
or revaluating the currency in order to gain a competitive and
comparative advantage towards neighboring nations.
These instruments make it possible to, for example: manage an increase or decrease in exports and imports.

I don’t support this strategy. On a short-term basis, it might be effective but it also allows governments to manipulate exchange rates and thus gain an unfair competitive advantage. Furthermore, there are certain risks related to applying these instruments that are important to consider. As an example, devaluation can aggravate inflation
causing higher interest rates and slower economic growth and it might be considered as an economic weakness affecting the credit-worthiness of the nation and the ability to secure foreign direct investments.

Drasko Markovic
Swedish
www.markovic.com

I think that the currencies are already regulated. Try changing some pesos for dollars.

Uwe Waechter
German
Foreman
Lufthansa Technik

No, because it is not good for the economy of the country. Controlling its currency is bad.