If a single currency in Asean looked far-fetched before, it looks positively absurd in view of the stresses afflicting the eurozone today. "Asean leaders are watching what’s happening in Europe extremely carefully now," says Helman Sitohang, chief executive, southeast Asia, at Credit Suisse. "It may provide some good lessons about how far you should push cooperation and integration."
A single currency is not on the agenda. You won’t find it in the long-term visions of Asean mission statements or ADB ambitions. But is it so strange an idea?
Edward Teather, economist at UBS in Singapore, points out that if you were to look at the ratio of the Thai baht to the Malaysian ringgit before the Asian financial crisis, and again today, it would be pretty much the same: around 10 times. "There is a linkage there, though it is not explicit in any way," he says. "Southeast Asian central banks and countries like to make sure their currencies don’t appreciate suddenly and in a fashion that renders their exports uncompetitive."
Not all cross-rates follow this rule but they’re generally pretty close. Asean currencies have, pretty much en masse, appreciated against the euro and dollar; they have also behaved in concert against resource currencies such as the Australian dollar and the Swiss franc.
