Prospects for a Single Asian Currency

Sen Gupta, Abhijit (2010): Prospects for a Single Asian Currency. Published in: Public Policy Review , Vol. 6, No. 5 (June 2010): pp. 873-892.

Abstract

This paper evaluates the prospects for greater exchange rate coordination amongst Asian countries. This would help in fostering greater trade and investment linkages within the region and diversification of the reserve currency away from the US Dollar, both of which would shelter Asian economies from events like the recent financial crisis in the future. The paper constructs an hypothetical Asian Currency Unit to evaluate the degree of exchange rate coordination amongst the member countries, and finds that the participating countries have displayed disparate movements against the ACU, indicating the varied objectives of the policymakers. The paper also evaluates role of some of the regional initiatives in encouraging financial and monetary cooperation, and concludes that while these initiatives are extremely important, they need to be significantly strengthened in a world of rapidly changing global financial architecture.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial crisis, Common Currency Area, Asian Integration
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics; F - International Economics > F3 - International Finance > F33 - International Monetary Arrangements and Institutions

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