July 4 (Bloomberg) -- Asian economies will avoid a repeat of the 1997-98 currency crisis because they have accumulated large amounts of foreign reserves, Asian Development Bank President Haruhiko Kuroda said.

``I don't see that any countries in the Asian region are going to face such balance of payments difficulties or a currency crisis,'' Kuroda said at the Foreign Correspondents Club of Japan in Tokyo today.

Asian economies were crippled by a currency crisis a decade ago when Thailand's devaluation of the baht prompted investors to pull money from the region. Countries including Indonesia, Thailand and South Korea spent most of their foreign reserves to prop up their exchange rates and had to borrow more than $100 billion from the International Monetary Fund.

``I don't think currencies in the region would be under significant pressure in the coming months or years,'' Kuroda said. ``I don't think any of them would request IMF or Chiang Mai Initiative supports.''

Asian countries have accumulated foreign exchange reserves in the decade since the crisis. South Korea had $258 billion in foreign reserves at the end of June, the sixth highest in the world, trailing only China, Japan, Russia, India and Taiwan.

Pool of Reserves

Finance ministers from 13 Asian nations, including South Korea, Japan and China, agreed in May to create a pool of at least $80 billion in foreign-exchange reserves to be tapped by nations in case they need to protect their currencies. That was an expansion of the so-called Chiang Mai Initiative under which pairs of nations would lend each other money at favorable terms if help is needed to support their exchange rates.

Growth in emerging Asia is ``quite robust,'' Kuroda said, adding that containing inflation is the ``No. 1 challenge'' for the region.

Record food and energy prices are fanning inflation across Asia, leaving its consumers with less to spend and threatening growth from South Korea to the Philippines at a time when the U.S. slowdown is weakening demand for exports.

Philippine inflation accelerated to 11.4 percent in June, the fastest pace in 14 years, the National Statistics Office said today. India's 11.05 percent increase in wholesale prices in the first week of June was the fastest in 13 years. Inflation in China accelerated to 8.1 percent in the first five months, the quickest since 1996.

Oil, Rice

Oil prices have doubled in the past year, while costs of rice, corn, wheat and soybean reached unprecedented levels in 2008.

Kuroda said central bankers in Asia are successfully tightening monetary policy to contain prices, and will keep doing so ``for some time'' as inflation persists.

``I'm reasonably confident that emerging economies in the region will overcome the current inflation and go back to a sustainable growth path,'' Kuroda said.

Authorities in India, Vietnam, Indonesia and the Philippines have increased interest rates this year to cool inflation. Indonesia yesterday raised its benchmark interest rate for a third month to combat record oil and food prices.

To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

Last Updated: July 4, 2008 02:33 EDT