Coping with a New Monetary Order after the Global Crisis
In a meeting of the ADB held at Hyderabad, India on 3 May 2006, finance ministers from Korea, China and Japan announced that they would take steps to coordinate their currencies in a way that would ultimately produce a common regional currency similar to the euro. They also added steps to study all the related issues, including the creation of a regional currency unit (RCU), which was often called an Asian Currency Unit (ACU). Although an Asian monetary union is a distant goal, the idea of an RCU could be an important step towards realizing monetary union in Asia. Indeed, an RCU was strongly supported by Kuroda (2006), President of the ADB, as a way of facilitating regional monetary union in Asia, and following his aspiration, the ADB is promoting the use of an RCU and preparing a regional cooperation and integration strategy. The idea of a currency basket has been a top policy concern of the Japanese government for a long time, although it has implied that it wanted to include external currencies, such as the dollar and the euro, in the basket. However, Japan changed its proposal so as to include regional currencies such as the Korean won and the Chinese yuan (Moon et al., 2005). Its recent proposal to introduce an RCU reflects this change in Japan’s policy regarding a regional currency. Since then, many academics have suggested developing an RCU as a parallel currency in Asia to further monetary integration in Asia.
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