61749    To keep inflation in check, the Mexican monetary authority developed a foreign exchange policy to maintain the benchmark for the peso to be higher than reality but was met by an aggressive counteroffensive from the market.

61750    However, the problem is that this currency turmoil was not contained to only Mexico, and spread to other regions including other South American countries, then Spain and Italy, and even Asia such as Thailand and Hong Kong.

61751    In other words, currency turmoil is not a local phenomenon and the monetary authorities must cooperate with each other to tackle it.

61752    With regard to the world economy, as a result of the East-West integration after the end of the Cold War, the economy in the East such as China took the lead from 1990 to 1992, followed by the economic recovery in the US, Europe and Japan, and we are about to see a simultaneous boom worldwide.

61753    What has happened as a consequence is a shortage of funds.

61754    While direct foreign investments were covering the US fiscal deficit for a time, as their volume grew less, dollar-buying by central banks in Asia and others made up for the loss, and now funds are mainly from borrowing on the short-term money market.

61755    The bottom line is that the simultaneous global economy boom is intensifying the competition to secure money.

61756    The Mexican currency crisis was also due to the situation where the capital influx from the US that had been covering the current account deficit dwindled down or even started to leave the country.

61757    That is why the finance ministers and the presidents of the central banks of the Group of Seven leading industrial nations should meet at the earliest opportunity to analyze the situation and come up with coordinated countermeasures.

61758    Since Japan has excessive savings and abundant foreign reserve, our monetary authority should actively cooperate in this effort.

61759    As the currency turmoil led to the high yen, the current situation is a negative one for the Japanese economy as well.

61760    We expect the leadership at the G7 to come from Japan for its own sake.

61761    With regard to the financial aid for Mexico, it is a matter of course that the US will play a major role in order to defend the North American Free Trade market.

61762    Japan also needs to provide Mexico with more official support than our expected share.

61763    As this is a problem of liquidity, it should be addressed in an aggressive manner.