China, Japan, Korea back Asian financial integration
In a joint statement, they called for more voting rights and representation at the IMF to reflect their economic power.india Updated: May 04, 2006 12:30 IST
Finance ministers from China, Japan and South Korea called on Thursday for more financial cooperation among Asian countries and said they would look further into the idea of regional currency units.
In a joint statement, they also called for more voting rights and representation at the International Monetary Fund to reflect their economic power.
"We noted the importance of sharing our long-term vision for financial integration in the region," the statement said.
"We agreed on further study of related issues, including the usefulness of regional currency units through the ASEAN+3 finance ministers' process."
The ministers, who met on the sidelines of the annual meeting of the Asian Development Bank (ADB) in Hyderabad said high oil prices and rising global interest rates could pose a major risk to regional economies.
They will take part later in a meeting with finance chiefs from the Association of Southeast Asian Nations (ASEAN+3). ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Asian nations are making gradual but solid progress in financial cooperation, but a home-grown monetary fund or a European-style common currency is decades away, at best.
"I think it's a pipe dream," said Nick Bibby, a strategist at Barclays Capital in Singapore. "We occasionally see calls for this but it never goes anywhere and I expect the same to happen this time."
Bibby said he questioned the suitability and viability of an Asian version of the euro because of widely varying levels of economic development in the region and a lack of transfer systems from areas doing well to those faring poorly.
During the ADB and ASEAN meetings, ministers are also likely to discuss imbalances of capital and trade flows around the globe -- problems that have put selling pressure on the dollar due to the US trade and current account deficits.
Japanese Finance Minister Sadakazu Tanigaki said there were excessive movements in the currency market.
"I will monitor them with strong interest," Tanigaki told a news conference after he met his Chinese and South Korean counterparts.
He told an ADB seminar that an overemphasis on exchange rate realignment to fix global imbalances could fuel speculation.