SINGLE CURRENCY NOT A PRIORITY FOR ASIA - MALAYSIA'S CENTRAL BANK GOVERNOR

KUALA LUMPUR, Oct 28 (Bernama) -- It is not a priority for Asia to have a
single currency to boost future growth as it is too costly, says Dr Zeti
Akhtar Aziz, governor of Malaysia's central bank Bank Negara Malaysia (BNM).

Zeti said she was against such measure because its implementation would be
difficult due to the diverse economic models practised in the region.

"We (the central banks in the region) have discussed so many times about
having a single currency.

"The conclusion is that we (the region) can achieve greater prosperity
without going through having a single currency," she said at the media
engagement programme on prospect & opportunities of Islamic finance at the
Global Finance Forum here today.

She said Asia's challenge would also be much greater than Europe's as
the region was the most diverse economy in the world.

In a medium term, she said, the costs and resources to implement such a
unified currency "far outweighs" the benefits that could contribute directly
to achieve greater financial and economic integration.

Zeti said the Asian region was well-positioned to deal with better inflows
due to better developed financial markets, rigorous surveillance and a larger
regulatory toolkit.

"The capital flows that are coming to the region and the potential for an
asset bubble were a challenge but the regional central banks would not only use
interest rates to deal with asset bubbles but also deploy macro-prudential
policies.

"We have more rigorous surveillance. We know almost real-time about these
flows, where they come from and where they are placed, whether equities or bonds
or deposits. We are better positioned now to deal with it," she said.

The governor said there was also no need to have a unified Islamic currency.

"In fact, it could set us back," she said, when asked if a unified Islamic
currency could further boost the growth of syariah-compliant financing.

On BNM's plan to award the mega Islamic bank licences, Zeti said a licence
would be issued by year-end and the bank would focus on international business.

"They will do some retail banking but the focus is international business.

"It is to enhance linkages around the world, including Europe and the US,"
she said.
-- BERNAMA