Use of National Currencies for Trade Settlement in East Asia: A Proposal
Lee, ll Houng; Park, Yung Chul | April 2014
Abstract
This paper develops a multilateral currency system where national currencies are used for trade settlement in East Asia, comprising the Association of Southeast Asian Nations (ASEAN) member countries, the People’s Republic of China, Japan, and the Republic of Korea (ASEAN+3). The currency scheme is expected to mitigate the risks associated with independent attempts at internationalization in non-convertible currency countries. It could also reduce dependence on the US dollar, safeguard against financial spillovers from outside, and deepen trade and financial integration in the region. The patterns and structure of trade and financial openness suggest that East Asia has already established an economic base upon which it could launch such a system. The experience with renminbi internationalization will help the Republic of Korea and ASEAN-5 to emulate this strategy.
Citation
Lee, ll Houng; Park, Yung Chul. 2014. Use of National Currencies for Trade Settlement in East Asia: A Proposal. © Asian Development Bank Institute. http://hdl.handle.net/11540/1236. License: CC BY-NC-ND 3.0 IGO.Keywords
Trade Finance
Rural Finance
Regional Development Finance
Public Financial Management
Public Finance
International Finance
Intergovernmental Finance
Financial System
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Citable URI
http://hdl.handle.net/11540/1236Metadata
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