ADB Urges Coordination in Forex Policies

Article excerpt

Emerging East Asian economies must coordinate their foreign exchange rate policies in the face of likely continued appreciation of their currencies next year, the Asian Development Bank said.The region's currencies are under increasing pressure to rise as a result of their faster economic turnaround, it said."In both nominal and real terms, several currencies have gained significant value against their trading partners since March this year, while some others have effectively depreciated as they have tracked US dollar movements," the ADB said in the December issue of its semiannual publication Asia Economic Monitor."A coordinated regional exchange rate strategy should be explored," the ADB said. It added that this would bolster intraregional trade and lower the fear of losing export competitiveness between neighbors.The Manila-based multilateral lender, however, doesn't have a specific recommendation on how countries can achieve such a coordinated policy."This is more a political, than economic, decision," Lei Lei Song, an economist at the ADB's Office of Regional Economic Integration, told Dow Jones Newswires in a telephone interview. …