ASEAN to switch to local currency use in the region to avoid crisis

Southeast Asian countries have agreed to reinforce the use of local currencies in the region and reduce reliance on major international currencies in an effort to avoid spillover from the global crisis, Indonesia's central bank has said.

The agreement came on the last day of a meeting of finance ministers and central bank governors of Association of Southeast Asian Nations (ASEAN) members, which was held in Indonesia's Bali island on Friday, with Indonesia being this year's ASEAN chair, Xinhua news agency reported.

Governor of Bank Indonesia Perry Warjiyo said the organization would establish a task force to formulate the transition process to use ASEAN local currencies in financial transactions as a realization of ASEAN's current local currencies settlement cooperation framework.

"With the use of local currencies in the transactions across the region, we will be able to strengthen our resilience in supporting regional cross-border trade and investment, which now are still relying on major international currencies," Warjiyo said at a virtual press conference after the meeting.

Warjiyo said if ASEAN countries could use their local currencies in the region, transactions and all payments can be conducted faster and able to tackle the global crisis. And if that is successful, their currencies' values will increase.

"At the moment, our numbers are small. But that's why we must move forward with this scheme. We must accelerate it," Warjiyo said.

He also said that in the meeting, the ASEAN countries have agreed to expand cross-border payment connectivity to more countries in the region.

--IANS

int/sha