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Asia may introduce a common currency in 2015

26 September 2009 09:10 (UTC +04:00)

Nobel Laureate Robert Mundell argued that Asia needs a common currency to reduce exchange rate volatility, which adversely affects growth and increases poverty. Asia may introduce a common currency in 2015. Mundell, Professor of Economics at Columbia University, said that while a single currency was not yet feasible, Asia would benefit from a parallel currency like the euro. The required agreement between Asian economies on a common inflation rate would need a leadership that Japan is best placed to provide, noted Mundell. But he added that Japan needs to address problems in its banking sector, a deflation policy, and the world’s largest public debt.
Mundell also said the international monetary system needs reform. The system would work better with fewer currency areas and less fluctuation in exchange rates among the dollar, euro, and yen areas. He advocated regional groupings based on political and economic objectives, as is happening in Africa and being discussed in Asia and South America.