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Promoting Local Currency Usage in the Region

Author

Listed:
  • Chalongphob Sussangkarn

    (Thailand Development Research Institute 565 Soi Ramkhamhaeng 39 Wangthonglang District Bangkok 10310, Thailand)

Abstract

This paper focuses on policies to promote the greater use of regional currencies in intra-regional trade and investment. This will reduce the dominance of the U.S. dollar and lessen the region's exposure to U.S. monetary conditions and monetary policy. A key focus in this paper is on policies to help set up efficient currency exchange markets to reduce currency exchange transaction costs. This is fundamental, as high currency exchange spreads between local currencies discourage local currency usage for trade and investment. China's policy to internationalize the RMB and set up offshore direct foreign exchange markets between the RMB and other currencies is also highlighted. Other important issues include the Local Currency Settlement Framework, the Asian Bond Market Initiative, and Asian Bond Funds.

Suggested Citation

  • Chalongphob Sussangkarn, 2020. "Promoting Local Currency Usage in the Region," Asian Economic Papers, MIT Press, vol. 19(2), pages 1-16, Summer.
    • Handle: RePEc:tpr:asiaec:v:19:y:2020:i:2:p:1-16
    as

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    References listed on IDEAS

    as
    1. Chalongphob SUSSANGKARN, 2011. "Chiang Mai Initiative Multilateralization: Origin, Development, and Outlook," Asian Economic Policy Review, Japan Center for Economic Research, vol. 6(2), pages 203-220, December.
    2. Daekeun Park & Yung Chul Park, 2004. "Toward Developing Regional Bond Markets in East Asia," Asian Economic Papers, MIT Press, vol. 3(2), pages 183-209.
    3. Barry Eichengreen & Domenico Lombardi, 2017. "RMBI or RMBR? Is the Renminbi Destined to Become a Global or Regional Currency?," Asian Economic Papers, MIT Press, vol. 16(1), pages 35-59, Winter/Sp.
    4. Chalongphob Sussangkarn, 2017. "Managing Economic Stability under Volatile Capital Flows: East Asia Perspectives," Asian Economic Papers, MIT Press, vol. 16(1), pages 174-192, Winter/Sp.
    Full references (including those not matched with items on IDEAS)

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