Sunday, 3 June 2007

Should we have a unified Asian Currency

Hi guys

I have been inspired by a friend to think about th question that should we have a unified Asian Currency....or more likely could we have one....just like in Europe.
What would be the possibilities and the hindrances? What would be the merits and demerits?

If any of you have given this a thought, or feel you could think about it, then please share your views with mine, by replying to this blog.


  1. I believe Asia as a continent is still not mature enough politically and economically to be a currency union...while countries like china,japan,korea and india have performed well there are alot of other countries that are virtually while having a single currnecy might work to their advantage,other so called high growth rate nations will show resistance.

    the first step towards a unified currency will have to be political cohesion and ironing out alot of differences among nations here.there will have to be an asian union concept which facilitates labour mobility.

    on the economic front,there are bound to be differences regarding the various central banks' views on the kind of excahnage rate they want to maintain.for eg,while india has managed floating,china follows an almost fixed exchange rate system.

    this is just a broad outline..but yeah,it is an interesting topic...we should carry on this discussion back in college!!!

  2. Just seven years after the introduction of the single currency in the European Union it’s a good time to think can we have a unified currency in Asia. the GCC (union of the countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates) is also planning to implement the same. Generally speaking, the greatest benefit lies in the reduction of transaction costs, which gives rise to greater efficiency and integration of the participating Asia countries. Enhanced price transparency can also be expected, which in turn leads to greater certainty with regard to planning in the business sector. Transparency also increases with the similar accounting practices.
    On the other hand, autonomy in monetary policy should be seen as a clearly negative aspect of unified currency as it allows only limited scope for responding to country-specific economic problems. Macroeconomic imbalances in one participating country could, under certain circumstances, give rise to a negative "spill-over" effect on the other countries Deep research is needed to bring out whether we have a adequate foundation for the successful implementation of unified currency. It is right to say Asia is not mature enough politically and economically to have unified currency, but proactive actions should be taken to create such an environment.