Asian Central Banks May Coordinate Crisis Efforts

By Shamim Adam

Oct. 11 (Bloomberg) -- Asian central banks are studying ways to coordinate an effort to tackle the financial crisis that threatens to erode growth and confidence in the region, Philippine policy maker Diwa Guinigundo said.

Regional officials are at annual meetings of the International Monetary Fund and World Bank in Washington amid a deepening slowdown as exports weaken amid a global credit crunch that's toppled banks in the U.S. and Europe. Asian economies have started to cut interest rates as policy makers shift their focus to supporting growth from fighting inflation.


``There is something that is being put together but it is still too early to say,'' Guinigundo, deputy governor of the Philippine central bank, said in an interview in Washington.

Asian stocks plummeted this week, sending the region's benchmark index to its biggest weekly drop on record, as the deepening crisis threatened to push more companies into bankruptcy.

The MSCI Asia Pacific Index fell 17.8 percent even as central banks in China, Australia, South Korea, Taiwan and Hong Kong's monetary authority joined a global effort to cut interest rates after the yearlong credit-market seizure.

Indonesia halted stock-market trading for a second full day yesterday, while a plunge in Thailand's SET Index triggered the first 30-minute trading halt in almost two years.

South Korea's Finance Minister Kang Man Soo will meet counterparts from Japan and Australia in Washington this weekend to discuss ways to boost regional cooperation ``to prevent a contagion to Asia from the international financial crisis,'' the South Korean finance ministry said yesterday.

Merrill Lynch & Co. this month cut its forecast for Asia's growth in 2008 and 2009. The region will expand 7.7 percent this year, and ease further to 7.3 percent in 2009. Both forecasts were reduced from previous predictions of 7.9 percent growth.

To contact the reporter on this story: Shamim Adam in Washington at sadam2@bloomberg.net