Asian forex reserves reach stratosphere ..BY: By P. Y. Chin ..LD: FROM China in the north, to Indonesia in the south and to India in the west, Asian countries are building up foreign exchange (forex) reserves to an extent that is causing the western world.

(From New Straits Times (Malaysia))

FROM China in the north, to Indonesia in the south and to India in the west, Asian countries are building up foreign exchange (forex) reserves to an extent that is causing the western world - especially the United States, Britain and Europe - to be alarmed.

There is now an intense economic debate, with political undertones, as to whether it is wise for a country to amass forex reserves.

The Western world is obviously, either out of desperation or jealousy, questioning such a move by Asian countries, which causes the US huge deficits in trade and capital accounts.

By the end of last year, for the first time in Asian banking history, the foreign reserves of all Asian countries leapt 33 per cent over the previous year's to breach the US$2 trillion (RM7.6 trillion) mark.

Of the total, today just six of the Asian economies have accumulated more than US$1.7 trillion in forex reserves.

And to give a perspective of the size of the total forex reserves, compare it to the total turnover of forex trading of about US$3 trillion at present.

From another perspective, in eight Asia's most important export economies, the increase in forex reserves was just over US$18 billion in 2002. At the same period in 2003, it increased to US$153 billion.

Taiwan's forex reserves alone are said to be half the size of its gross domestic …