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As a part of
the ongoing work on monetary and financial cooperation in Asia, a
proposal of Reserve Bank of Asia (RBA) as an institutional
infrastructure has been developed (PB #3).
It has been shown that an institutional infrastructure like RBA
could enable the region to harness its substantial foreign
exchange reserves for its development besides providing a basis of
exchange rate stability. Another study on the subject examined
relevance of India’s monetary integration with East Asia. The
analysis shows that significant complementarities in trade exist
among these countries, most of them experience similar shocks and
labour mobility is already present. These results point to the
fact that the cost of adopting a single currency may be minimal,
while huge benefits could accrue from enhanced trade. The study,
issued as an RIS Discussion Paper (#64),
also recognizes the importance of yen for the success of the
monetary union in Asia.
Research Team: Dr. Ramgopal
Agarwala, Dr. Sweta C. Saxena and Dr Mirza Allim Baig
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