The US dollar's slide against Asian currencies could provide a catalyst for greater regional economic cooperation in an effort to avoid another financial crisis, experts said.
So far this year the US unit has fallen by between 5 and 7 percent against the Thai baht, South Korean won and Indonesian rupiah amid worries about global economic imbalances and upward pressure on the Chinese yuan.
This is putting pressure on Asian economies by making their exports less competitive and cutting into companies' repatriated profits and leaders in the region are worried that the US dollar will continue to decline.
"I don't see how small economies like ASEAN can hope to survive through upcoming volatility," acting Thai Finance Minister Thanong Bidaya told a recent forum in Tokyo hosted by the Nihon Keizai economic daily.
"[But] we have to be ready to [survive] and one way is to try to develop the Asian bond market and reduce volatility of the Asian currencies as much as possible and then rely on each other," he said.
"If one of the small ASEAN economies collapses again then there can be a contagion risk and it can create another Asian [financial] crisis and that's why we need the political will" for closer cooperation, Thanong said.
A meeting of the ASEAN members along with China, Japan and South Korea agreed in Hyderabad, India, earlier this month to study the possibility of a single Asian currency similar to the euro.
The Asian Development Bank (ADB) has been spearheading a proposal for the creation of an Asian currency unit or ACU, which is an index of currencies, as part of a bid to bolster monetary stability and spur regional economic growth.
The ADB is also supporting the Asian Bond Market Initiative to develop an efficient bond market for the region.
Finance ministers of ASEAN Plus Three -- which includes Japan, China and South Korea -- have already made progress in boosting financial and monetary policy coordination, said Masahiro Kawai, head of the ADB's office of regional economic integration.
"But substantive coordination could be prompted by a sudden US dollar crunch which is possible," he told the forum.