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| Asia urged to mull common currency, monetary fund |
| 09-JAN-2010 Intellasia | AFP | Business Times |
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| 9 Jan, 2010 - 7:12:00 AM |
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Asia should consider a common currency and push for a regional monetary fund as economic integration picks up speed, a former top Japanese finance official said yesterday.
Eisuke Sakakibara, who served as Japan's vice finance minister for international affairs during the Asian financial crisis, admitted that a common currency may be some time off but argued it was time to think about the idea.
"It may be several decades to create an Asian currency, but it may be the time to start thinking about it because Asian economic integration is approaching the level of Europe," he told a regional forum in Singapore.
His comments come as the global economy slowly moves out of its worst crisis in more than 70 years, with most analysts acknowledging Asian nations were leading the way.
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| (Reuters) |
Key Asian states have been moving to tear down trade barriers and streamline trading rules and procedures in a bid to better link their economies.
A network of free trade agreements have already been signed and more are under negotiation. And on January 1, a giant free trade zone covering 1.7 billion consumers in China and 10 Southeast Asian nations went into effect.
Sakakibara, also said an Asian version of the International Monetary Fund (IMF) has become more relevant, given the region's deepening economic linkages.
Such a fund will help ensure that central banks have enough to shield their currencies from speculative attacks like those during the 1997-1998 Asian crisis.
"East Asian countries together now own close to $5 trillion (US$1 = RM3.37) of foreign reserves... If we could use about 5 percent of those foreign reserves, it would be around $250 billion, which is enough to create the common fund," he said.
Japan proposed the creation of an Asian Monetary Fund during the 1997 meltdown after the IMF came under heavy fire for the way it handled the crisis.
http://www.btimes.com.my/Current_News/BTIMES/articles/asia77/Article/
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