Turkey might be part of a new Asian currency, expert says

25.04.2011

GÖKHAN KURTARAN- ISTANBUL

As the economic rise of Asia generates a need for an alternative to the US dollar, a parallel broad-basket Asian Currency Unit, Turkey might also consider being part of the new Asian currency rather than Euro said the professional speaking to Hürriyet Daily News & Economic Review on Friday.

“Turkey will be in a position to make a tough decision between a new Asian currency and Euro in next five to ten years,” said Tim Jones, program director of Future Agenda, a program addressing the challenges of next decade, in an interview in Istanbul. 

According to Jones, today there are essentially two key currencies that can be considered as global reserve currencies: the US dollar and the Euro and key commodities such as oil, gold, steel and so on are priced. Jones said, “Many leaders in Asian countries suggesting a new basket of Asian national currencies which could be used in international trade as the oil and food prices decrease with the international trade on a new world currency.”

Not only do they want to avoid having to use the dollar as the de facto intermediary for many international trades, they also want to keep their money within their own control with less dependency on the strength of the US economy and the highly US-orientated global financial institutions, according to Jones.

Jones said that China and Japan as well as many others such as Thailand, Vietnam and Malaysia are keen to have an alternative option to the U.S dollar; the new global currency could not be Euro due to ongoing Eurozone crisis. Fueled by the booming developing economies, attempts of such basket of Asian currency would likely be in the agenda of Turkey to be discussed in next years. “What will be the role of Turkey in such Asian attempt,” asked Jones.

Having a finance center bring liability to Turkey

Reminding Turkey’s target of turning Istanbul into one of the top finance center of the world by the 2023, the hundredth anniversary of modern Turkish republic, Jones said, “in order to become a finance center, the world’s largest banks has to be attracted to move their headquarters to Turkey”. Jones added, “This would bring liability to Turkey.”

Jones noted that the global economic crisis affect on the global finance centers. He said, “the big banks in New York, London and Frankfurt had been bailed out by the countries hosted them.” Jones explained, “The question is that do you really want to put ourselves in such position.” According to him if the answer “yes,” Turkey has to decide what type of finance center Istanbul could be; “Dubai, Singapore, Hong Kong, London or New York “

According to Jones, if Turkey wants to turn Turkey into a finance center, the country has to bare in mind Turkey’s liability for all the banks to be headquartered in Istanbul in the future. “Is Turkey ready for such position” asked Jones adding that Turkey might not consider European Union membership “until the European economy recovers and solve its financial problems.” Reminding Germany, “Turkey would not like to be a lender country for bailouts in Eurozone.”