The crisis exhibited itself in growing budget and trade deficits, currency impacts, higher rates of inflation, increasing public debt and dwindling currency reserves 2. So to reiterate, a stable and well-regulated financial sector is vital for the achievement of our long-term sustainable economic growth and developmental objectives. Given the growing interconnectedness of financial markets, international financial stability has become a global public good.
Over the medium to longer term, the exchange rate regimes and related policies are likely to be influenced by (a) the confidence in the strength of Asian economies; (b) perceived resilience of their economic as well as financial systems; (c) growing economic and financial integration amongst Asian economies; (d) emerging significance of Asian economies in the global economy; (e) the state of international financial architecture and market conditions and (f) policy-induced measures for co-operation and co-ordination amongst Asian economies.