Financial Policy Cooperation in SAARC: A First Step towards Greater Monetary Integration in South Asia

Abstract

As intra-SAARC trade increases, there is a growing need for higher levels of intra- SAARC financial policy cooperation to ensure a stable financial environment by limiting uncertainty for payments. This will facilitate the process of regional trade integration. The experience in Europe suggests that both cooperation in intra- SAARC regional monetary and liberalization policy along with the setting up of an institution to manage trade and payments could contribute towards laying the foundation for future financial coordination with eventual higher levels of mon etary integration within the SAARC region. The paper highlights some areas in this regard, and discusses some paths for greater financial cooperation in South Asia.

Keywords

(JEL: F02) Keywords: South Asia Financial and Policy Cooperation Monetary Integration.

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