Businesses back currencies for intra-ASEAN trade
Businesses back currencies for intra-ASEAN trade
JAKARTA (JP): Business representatives of the Association of
Southeast Asian Nations (ASEAN) came out yesterday in support of
regional currencies for intra-ASEAN trade.
They said this move would help reduce dependence on the U.S.
dollar and the transaction cost for intra-ASEAN trade
settlements.
"The ASEAN Bankers Association is currently studying possible
mechanisms, in consultation with ASEAN central banks, to
operationalize the concept," they said in a joint statement
issued following a two-day private sector roundtable on the
impacts and responses to the financial crisis affecting the
region.
Those involved include the ASEAN Chamber of Commerce and
Industry, ASEAN Business Forum, ASEAN Federation of Accountants,
ASEAN Forum of Credit Rating Agencies and ASEAN Bankers
Association.
The ASEAN Bankers Association will submit its proposal to
regional authorities for consideration by mid April once the form
had been finalized at its next meeting, the groups said.
They added that they expect the measure to be the first step
toward an integration of all the currencies into one ASEAN
currency in the future.
Most international trading deals in the region are currently
made in U.S. dollars.
The greenback has appreciated by over 300 percent against the
rupiah since July. The currency crisis plaguing several Asian
countries had also caused other currencies in the region to fall
sharply against the dollar.
The proposal to use the regional currencies, advocated by
Malaysia's Prime Minister Mahathir Mohamad early last month in a
bid to reduce dependence on the U.S. dollar, has won wide support
from other ASEAN members.
During the two-day meeting, the groups exchanged their views
on the crisis and explored alternative measures to resolve the
issues.
They recognized the need for uniform accounting and auditing
standards and practices in ASEAN to ensure greater accountability
and reliability of corporate financial information.
They also urged governments in the region to loosen the
liquidity of the ASEAN countries because tight liquidity had
further squeezed their economies.
"The present monetary measures being adopted in the region are
far too tight and this could seriously hamper the recovery
process and dampen the general business environment," they said.
The groups stressed the importance of prudential regulations
and effective supervision of the capital market.
They agreed to explore the possibility of promoting a well-
managed ASEAN bond market to reduce financial instability and
vulnerability to volatile capital flows.
Heads of the delegations at the roundtable meetings included
ASEAN Secretary-General Rodolfo C. Severino, ASEAN Banking
Council Chairman Olarn Chaiprawat and the secretary general of
ASEAN Chambers of Commerce and Industry, Setyanto P. Santosa.
(das)