Renminbi zone will emerge slowly in ASEAN region

Subject

Efforts in South-east Asia to reduce reliance on the dollar.

Significance

The ten ASEAN members and three East Asian states are exploring ways to create buffers against financial volatility. They are considering including the renminbi in their currency swaps.

Impacts

• Integration of production lines will aid acceptance of the renminbi in the ASEAN region.
• Within a renminbi zone, movements in the renminbi’s value would affect ASEAN currencies.
• The dollar, regarded as more secure, will remain the most important reserve currency in South-east Asia.