KUALA LUMPUR: The development and strengthening of the national financial market is essential for the member countries of Asean Plus Three (Asean + 3) to reduce the dependence on the US dollar in the region, thus helping to minimize vulnerability to external shocks, Bernama reported.
The news agency quoted the Director-General of the Institute for Economic Research and Managing Director for Northeast Asia, Masahiro Kawai, as saying that the ASEAN + 3 economies have taken gradual steps to s away from the US dollar, albeit at a slow pace, due to the currency’s attractiveness. .
He said that as countries strengthen their financial markets, there is enormous potential for using national currencies for international transactions, especially for countries that are making efforts to internationalize their currencies, which Japan, China and Thailand did in the early 1990s, the report noted.
“I think developing and strengthening the domestic financial market is the most important direction, but it takes time.
“We cannot immediately move away from the dependence of the US dollar on the use of regional currencies.
“Therefore, for now, the ASEAN + 3 economies must continue to strengthen their policy framework to deal with the dominance of the US dollar in the international monetary system,” he said during the impact webinar. Asian Development Bank (ADB).
He noted that the Thai baht is currently Indochina’s most developed financial market, according to Bernama.
The economist said that a large outflow and inflow of capital would put pressure on the financial market of individual economies, as a more solid policy framework for macro-financial stability is important.