Southeast Asian central bank governors and finance ministers are set to wrap up talks on Friday, after meeting in Bali this week for discussions often focused on how the region can remain resilient in the face of a spike in global risks.
The gathering of finance leaders from the Association of Southeast Asian Nations (ASEAN) comes amid a backdrop of recent global banking turmoil after the collapse of Silicon Valley Bank and the bailout and takeover of Credit Suisse.
“Our (ASEAN) problems are the same, high inflation, financial market turmoil, capital outflow…now we also look at the impact of banking turmoil in the U.S. and Europe on the region,” Indonesia’s deputy central bank governor Dody Budi Waluyo told reporters late on Thursday.
Finance deputies meeting earlier this week put forward a proposal that countries in the region increase the use of local currencies for trade or investment in order to reduce dependency on currencies such as the U.S. dollar.
“It is felt as beneficial for the economy to be resilient, because we are not exposed to too many hard currencies,” said Dody, referring to safe-havens like the dollar and the euro.
Dody also said finance deputies discussed connecting payment systems in the region, even though the infrastructure of some ASEAN countries was not fully developed yet. They also discussed cryptocurrencies and central bank digital currencies, he said.
At a meeting on the sidelines of the event, the central bank governors of Indonesia and the Phillipines said their banking systems were resilient and that stricter regulations were in place to prevent a repeat of the Asian financial crisis in the late 1990s.
“People running the banks (now) were probably vice president or the managing director in 1997. They knew the memory of the Asian financial crisis,” Philippine central bank governor Felipe Medalla told the seminar on economy resiliency.