Sri Lanka to lead South Asian initiative to study impact of oil prices

SINGAPORE, September 20, 2006 (LBO) – Sri Lanka is leading a South Asia initiative to study the impact of oil prices and its effects on macro economic policies, Bangladesh's Central Bank governor said. Finance misters of the South Asian Association for Regional Corporation (SAARC) – an eight member regional grouping – who met on the sidelines of IMF World Bank also discussed the possibility of setting up an Asian Monetary Fund and floating a single currency for the region.

The possibility of a single currency and a regional specific fund however, requires policy co-ordination by individual governments, Governor Salehuddin Ahmed said at the end of SAARC finance ministers meetings here.

However, Sri Lanka's suggestion for SAARC members to make their bi-monthly payments to the Asian Currency Union (ACU) in multiple currencies was accepted on a positive note, Salehuddin said.

Asian countries currently repay ACU payments in U.S. dollars and the proposal, once accepted gives members the option of paying even in euros.

SAARC members also discussed ways to simplify their financial systems in order to encourage worker remittances.

Indians, Sri Lankans, Bangladeshis and Afghan