ABSTRACT
This chapter explains current regional currency cooperation in East Asia. It presents a multi-step process towards East Asian Currency Cooperation which includes a common currency in East Asia. It is most important for East Asian countries to take a first step towards regional monetary coordination in East Asia by introducing a Regional Monetary Unit (RMU) into the region. The Association of Southeast Asian Nations (ASEAN) Plus Three Financial Ministers Meeting established a research group to study an RMU for coordinated exchange rate policy. The Japanese yen functions exogenously similarly to the US dollar and the euro in a system comprising East Asian currencies, which implies that it increases the possibilities of success in adopting a common currency basket arrangement into the ASEAN Plus Three countries that include Japan. It is more possible for the ASEAN Plus Three countries to succeed in adopting a common exchange rate policy in the post-crisis period than in the pre-crisis period.
