Soros warns of Asian `wildfire' as markets rally
Thursday 15 January 1998
George Soros, the billionaire investor who last year criticised the way South-east Asian governments ran their economies, yesterday warned that the region's financial crisis was "a wildfire that has not yet been tamed".
"Developments in Asia have the power to destroy the system of world trade," he said, adding that a spill-over of the crisis to China and Latin America could not be ruled out.
Mr Soros, in an interview with a German newspaper, said the crisis showed there was a need for tighter regulation of the provision of credit.
His warning did little to dampen sentiments in the region as shares and currencies rallied for a second day on optimism that the financial crisis might be bottoming out. Indonesian markets led the gains, with the stock index surging as much as 9 per cent and the currency strengthening 16 per cent.
Meetings between President Suharto, a US presidential envoy and IMF officials allayed concern that the IMF might suspend more than $43bn of aid to encourage the government to cut spending and deregulate the economy.
Michel Camdessus, the IMF's managing director, said it would seek a "dramatic acceleration" of reforms in Indonesia, raising hopes for a more stringent timetable to restore confidence in the economy. He is drafting a new letter of intent on reform to be signed in Jakarta, after increased spending in Indonesia's budget last week sparked concerns that the country was not serious about reform.
Markets that slumped on Monday extended their rally after gains in US stocks on Tuesday night. Tokyo's benchmark Nikkei 225 index rallied 2 per cent, Hong Kong's benchmark stock index rose 5 per cent, Singapore's jumped more than 7 per cent and Malaysia's gained almost 8 per cent.
Meanwhile, a confidential study by the IMF acknowledged that an important element of its rescue strategy for Indonesia backfired, causing a bank panic that helped set off financial market declines in much of Asia, according to a report in the New York Times. Instead of inspiring confidence as hoped, bank closures helped bring Indonesia's banking system to the brink of collapse.
- 1 East 17 bandmember Brian Harvey in 'very desperate situation’
- 2 Is this bridge haunted by the ghost of nu rave?
- 3 Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
East 17 bandmember Brian Harvey in 'very desperate situation’
Is this bridge haunted by the ghost of nu rave?
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
Saudi Arabia says it won't rule out building nuclear weapons
Germanwings plane crash: Andreas Lubitz 'had eyesight problems' and woke from nightmares 'screaming we’re going down'
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...