Asian nations should work to stabilize foreign-exchange moves within the region and avoid competing against each others’ currency declines, Asian Development Bank president Haruhiko Kuroda said.
What is “worrisome is the heightened volatility and growing divergence in currency movements within the region,” Kuroda said in a speech delivered yesterday at a meeting between finance ministers from Japan, China, South Korea and ASEAN.
Asian countries have experienced steep moves in their currencies over the past year, undermining regional financial stability, as offshore investors to dump emerging-market assets. South Korea’s won has tumbled 37 percent against the US dollar, Indonesia’s rupiah has dropped 23 percent, while Japan’s yen has risen 14 percent.
“While we understand how sensitive this is, helping stabilize currency movements between trading partners in our region can fortify the accelerating trend of intraregional trade and investment flows,” Kuroda said. “We should avoid competing against each others’ currency depreciations.”
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