A single Asian currency may take years to develop, Japanese Finance Minister Sadakazu Tanigaki said.
ASEAN, China, Japan and South Korea said on Thursday they would study the creation of an index of the region's currencies that could be a precursor to a common exchange unit. The Asian Development Bank said in March that it was working on such an index, called the Asian Currency Unit (ACU).
The idea of a single currency for Asia and of integrating the region's economies came about after the financial crisis of 1997-1998 and has been backed by the Asian Development Bank (ADB) President Haruhiko Kuroda. A common Asian currency would make it easier for companies and governments to borrow at lower rates of interest, according to Standard & Poor's.
PHOTO: AP
"Currency integration won't take place overnight as was seen in the experience in Europe," Tanigaki said at the annual meeting of the Asian Development Bank in Hyderabad, India.
"Although such a move is not in sight, not only economic cooperation but also political will will be required to see currency integration in Asia," he said.
Finance ministers of the group of 13 Asian nations on Thursday said that a Japanese research institute would study the steps needed to create "regional monetary units."
In a statement delivered to the ADB meeting, the governor of Taiwan's central bank applauded the bank for taking an important step to introduce the ACU, but expressed concern over the possible exclusion of the New Taiwan dollar from the eventual composition of the ACU.
"As a weighted index of a basket of Asian currencies, the ACU will serve as a benchmark to monitor movements in the values of currencies in the region," central bank governor Perng Fai-nan (
"The ACU's currency composition will be extremely important in representing the true economic configuration and financial structure of Asia. It seems to me that the current proposals for the ACU has left out some major currencies like the NT dollar," Perng said.
The NT dollar's inclusion was necessary, Perng said, given the size of Taiwan's GDP, its substantial trade and capital accounts, as well as the nation's improved financial development and market transparency.
But analysts said that the inclusion of the NT dollar, as well as the currencies of Hong Kong, Australia and New Zealand, in the ACU may face strong objection from China and the ASEAN economies.
A currency index "can be seen as an initial step toward an Asian currency unit, which would be the equivalent of the euro, but it's something that may be possible in a generation, say 25 years," Tim Condon, head of Asian markets research at ING Groep NV in Singapore, said in a telephone interview.
Developing a single currency will help borrowers to tap Asia's savings and "help to develop a vibrant Asian bond market as we have seen in Europe," Surinder Kathpalia, S&P's managing director said Friday in an interview in Hyderabad. "But that is still very long way off."
A common Asian currency isn't a precondition for the development of a pan-Asian bond market, Asian Development Bank Chief Economist Ifzal Ali told reporters on Friday. The European bond market was functional well before the euro became a common currency, he said.
ASEAN Secretary-General Ong Keng-yong said on Thursday that the development of a single currency isn't high on his group's agenda.
"People like to talk about it but these are just academic discussions," Ong said.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure
RSS