Rubin pledges support to Asia

By Calvin Woodward Associated Press Published:

Speaking days after tumult in the Hong Kong stock market shook the financial world, Rubin said outside help must be directed mainly through multinational agencies. He stressed the key to a lasting solution lies in the region.

"The countries themselves have to re-establish sound policy regimes," he said on ABC's "This Week."

Asked whether Washington would consider a reprise of its response to Mexico's 1994 currency crisis, when it bolstered the beleaguered peso with a $50 billion loan package, he said: "That is not envisioned here. The key participants here will be the IMF (International Monetary Fund) and the World Bank."

Thailand was forced to devalue its currency in July, and since then other nations in the region have experienced plunging currency values. Last week a sharp rise in interest rates in Hong Kong prompted a sell-off that shook markets around the world.

The sell-off at the New York Stock Exchange on Thursday and Friday hit companies that do business in Asia especially hard and left the Dow Jones Industrial Average down more than 130 points.

"I think the world community is clearly strong enough to overcome this problem," Rubin said. But he said more money from international financial agencies financed by the United States and others may be needed.

The United States is "part of a much larger process," he said, and is working on a "multilateral response that will be focused around the IMF and World Bank."

Thailand received a $17.5 billion internationally sponsored aid package in July, the second largest of its kind after bailout that helped Mexico solve its peso crisis.

Even while expressing confidence in renewed financial stability in Southeast Asia, Rubin said he did not now how long the recovery might take.

Want to leave your comments?

Sign in or Register to comment.