Anti-govt protests delay Thai signing of exchange accord

March 19, 2010
(Reuters)

BANGKOK- A week-long rally by red-shirted anti-government protesters has delayed Thailand's signing of an accord for East Asian countries to cooperate in fending off future attacks on their currencies.

Currencies

A parliament session scheduled for last Tuesday was postponed for lack of a quorum after politicians in Prime Minister Abhisit Vejjajiva's coalition failed to show over concerns protesters might lay siege to the legislature. The supporters of ousted former premier Thaksin Shinawatra rallied for a seventh day on Friday [IDnSGE62I02Y]. They have vowed to march around Bangkok on Saturday and say they would only target parliament if Abhisit sought to go there.

Among the 13 nations who would be part of the accord, Thailand is the only country yet to sign the agreement to pool $120 billion of foreign reserves set aside for helping countries cope with short-term dollar liquidity or balance of payments problems.

Finance Minister Korn Chatikavanij is barred by the Thai constitution from signing the accord until parliament approves it.

"We are trying our best to get parliament to approve it during the current parliament season before it goes into recess on May 20," Thanitpol Chaiyanant, a lawmaker in Korn's Democrat Party, told Reuters.

The accord, called the Chiang Mai Initiative Multilateralisation Agreement in recognition of the Thai city where the regional cooperation was originally proposed over a decade ago, will come into effect on March 24 even without Thailand's signature.

Countries already acceding to it are China, Japan, South Korea, and the Association of South East Asian Nations (ASEAN), which comprises Indonesia, Malaysia, Singapore, the Philippines, Brunei, Vietnam, Laos, Cambodia and Myanmar.

To ratify the accord, the signatures of China, Japan, South Korea, plus five ASEAN members, are required to bring it into effect.

The initiative is launched at a time when most of its cash-rich signatories face no immediate need for financial assistance, having piled up foreign reserves earned from big trade surpluses and capital inflows in recent years.

China alone had $2.4 trillion of foreign reserves, the world's largest, at the end of 2009. Japan's reserves stand at $1 trillion and South Korea's $271 billion. (Reporting by Vithoon Amorn; Editing by Martin Petty and Jerry Norton)