Single Asian Currency Comes a Step Closer to Reality

      January 13, 2006 20:17

      The Asian single currency, which so far only exists in the minds of economists and officials with international organizations, will take on more concrete reality soon. The Asian Development Bank plans to publicize the Asian currency unit (ACU), a notional unit of exchange based on a "basket" or weighted average of currencies used in the 10 ASEAN member countries plus South Korea, China and Japan, the Yomiuri Shimbun and others reported Friday.

      But that does not mean that any bills or coins will circulate any time soon. The ACU is only the first step toward the integration of Asian currencies, a "virtual currency" that takes into consideration GDP and trade volume of each of the 13 nations and serves as a gauge for governments to implement foreign exchange policies. So far, Japan and China have tried to make their own national currency into the Asian currency, but their jostling in effect canceled out the efforts of the other. That is why the ACU is gaining support on the road to a single currency.

      Given that it took more than 30 years for Europe to launch its single currency, the euro, Asians also probably have a long road ahead until the ACU or its successor chinks in their pockets. However, it could take less time than in Europe since internal trade volume in the region is increasing faster than external trade volume with the U.S. or Europe, according to Yun Deok-ryong, a researcher with the Korea Institute for International Economic Policy.

      Still, many obstacles lie ahead. The U.S. above all is likely to worry that it will lose its influence over Asian economies and use the International Monetary Fund to block the introduction of the ACU. The launch of the Asian Monetary Fund, which is to coordinate monetary policies in the region, faces objections from the U.S., which does not want to see an Asian single currency emerge as another key currency along with the dollar and euro in the global financial market, an official with the Ministry of Finance and Economy said.

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