A Research On The Asia Currency Unit

Monetary cooperation has made interim achievements in east Asia after the Asian financial crisis, but rate exchange cooperation, the core part of regional monetary cooperation, has failed to make further progress. As a key link in the process of monetary cooperation of east Asia, if effective regional exchange rate cooperation mechanism could not be established, it would be hard for monetary cooperation in east Asia to developed continuously in the future. Economists has discussed many proposals about regional rate exchange cooperation, including the East Asian Dollar Standard, the Yen Bloc, the Common Basket Peg and Parallel Currency. But most of the proposals require the economies to release of policy sovereignty, so it is difficult to reach a consensus on specific way of exchange cooperation. The proposal of Asian Currency Unit(ACU) provides a new and realistic choice for the currency cooperation in east Asia: ACU works simply as a index which can measure the stability of regional exchange rate at the beginning, which doesn't need any policy coordination and commitment from the member countries; If ACU can develop smoothly, exchange rate policy cooperation centering on ACU will form in the way of negotiation.The European Currency Unit(ECU), which is the predecessor of euro, played an important role in the European monetary cooperation since its birth in the region, and laid solid foundation for the final transition to a single currency in European Union. It brings inspiration to the Asian Currency Unit, which is not only the calculation methods, but also the consciousness of East Asian countries to make monetary policy coordination to reduce external shocks, and peg to a common basket is a necessary step of the regional monetary cooperation and the best way to a monetary union.Asian Monetary Unit(AMU) and its deviation indicator, which is drawn up by the Japanese scholars, is the most complete plan despite some defects so far. If it can be successfully implemented, it will promote monetary cooperation development in East Asia from various aspects. Since the RMB exchange rate reform, the formation of the mechanism of RMB exchange rate based on market supply and demand and with reference to the currency basket means the government hopes to get closer to the RMB equilibrium exchange rate and keep the RMB trade-weighted effective exchange rate stability. By keeping the relative stability of the exchange rate between RMB and ACU, China can resort to the international financial market to realize the two objectives above in the reform of the RMB exchange rate system, in order to advance the regionalization and internationalization of RMB.