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South Asia not ready for common currency
(Daily Star/ANN) South Asia is not yet ready for a common currency, said economists from countries in the region at the opening of a two-day 14th South Asia Economic Summit in Sheraton Dhaka on Saturday.
However, integration in trade and investment, increased mobility and people-to-people connectivity will provide the incentive for monetary cooperation in the region, they told a session on macroeconomic cooperation and the possibility of a common currency.
South Asia accounts for nearly one fourth of the global population and it has the market and ability to grow together, said the economists at the event being hosted by the Centre for Policy Dialogue.
Yet it is the least integrated in terms of trade, said Zahid Hussain, former lead economist at The World Bank, Bangladesh.Intra-regional trade accounts for 5 percent of South Asia’s total trade whereas the share of intra-regional trade in the Association of Southeast Asian Nations (Asean) region is 25 percent, he said.
South Asia is diverse in land area, gross domestic product or economic output, and population but the region’s countries have similar levels of human and economic development which calls for increased integration, he said.However, there is a lot of barriers to mobility, he said, citing non-tariff barriers, complicated visa policies and rigid bureaucracies.
“There is high sensitivity to national sovereignty. National currencies evoke strong attachment and emotion,” said Hussain at the event.
Political will to give up fiscal and monetary autonomy is also necessarily to go for a common currency, he said.
Complementarity in trade and free flow of labour and capital among the members can make cooperation over a currency more likely, he said.
Several countries have taken steps to reduce dependence on the US dollar and Bangladesh also took bilateral initiatives to settle trade in Chinese yuan and Indian rupee in 2022 and 2023, said Hussain.
However, the response with regard to trade in rupee is muted while exporters in China prefer receiving payments in dollars, euro and pound sterling, he said.There is persistent and growing trade deficit among Bangladesh, China and India, which makes trade in rupee and yuan limited here, he said.
Bangladesh’s average monthly trade deficit is $1.13 billion with China and $644 million with India.Comparability of economies is needed for a common currency, said Md Habibur Rahman, chief economist at Bangladesh Bank. “We are not right there…We can search for an appropriate time and opportunity for this,” he said.
A mechanism enabling independence is needed to avoid sanctions, said Abid Qaiyum Suleri, executive director at Sustainable Development Policy Institute, Pakistan.
Pakistan is relying on barter trade with countries such as Afghanistan, China and Russia, he said.
“Instead of losing hope on a common currency, we can explore so that we reduce dollar dependence,” said Suleri.
Posh Raj Pandey, senior economic advisor of the finance ministry of Nepal, proposed for establishing a regional financial market in this regard.
Use of the US dollar for international transaction settlement is declining, said Professor Sachin Chaturvedi, director general of the Research and Information System for Developing Countries, India.
International transactions other than that of the US dollar accounted for 9 percent of total global trade in July 2022 and it rose to 14 percent in December the same year, he added.
“This is an indication of rising arrangement of settlement in non-dollar,” he said, adding that 38 countries have shown interest to trade with India in rupee.
However, to make trade in the rupee popular between Bangladesh and India, a large line of credit in rupee is needed, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
“Otherwise, the performance we have seen is dismal…We also should think of currency swap to protect against external shock,” he said.
Countries should start with trade facilitation for economic integration and go for common documentation for customs, encourage firms to invest regionally and foster people to people connectivity, said Mansur.
Visa issuance and border control is quite pervasive and old fashioned, he said.
The economist also suggested harmonisation of tax and trade policies among members of the South Asian Association for Regional Cooperation.
“We also need monetary policy harmonisation. We need to think about bringing inflation close to each other and currency stability. Cooperation at the institutional level is critical,” he said.
News
Controversy over absence of Agriculture Minister, Deputy at NPP’s inaugural farmers’ rally
By Shamindra Ferdinando
The absence of Agriculture Minister Lal Kantha and his Deputy Namal Karunaratne at the NPP’s farmers’ rally at Polonnaruwa, on Saturday (12) revealed the government’s failure to address the problems faced by the farming community, the SLPP says.
Former Kalutara District SLPP MP Sanjeewa Edirimanna said that politburo member Lal Kantha, who represented the NPP’s highest decision-making body, and his Deputy, Karunaratne, couldn’t face the farmers, and hence their absence at Saturday’s rally. Their absence underscored the gravity of the situation, Edirimanna said, thanking the NPP for openly acknowledging the crisis in the agricultural sector.
Kandy District MP Lal Kantha was not immediately available for comment. When The Island sought an explanation from Deputy Minister Karunaratne regarding their absence, he said that there was no need for all of them to attend each and every NPP rally.
President Anura Kumara Dissanayake addressed Saturday’s gathering on behalf of the party and there shouldn’t be any issue over their absence, MP Karunaratne said.
Karunaratne said so when The Island pointed out that their presence mattered as it was the inaugural farmers’ rally held almost two years after the last presidential election.
MP Karunaratne claimed that the Polonnaruwa rally was not on his schedule for 12 Sept.
Ex-MP Edirimanna pointed out that Minister Lal Kantha had addressed both the Bulathsinhala and Beruwala rallies, held on 6 Sept., which marked the commencement of the NPP propaganda campaign, launched amidst growing dissent over the way the government sought to enact the 22nd Amendment to the Constitution.
Edirimanna said that the NPP couldn’t justify both Ministers in charge of agriculture skipping the Polonnaruwa rally. Responding to another query, Edirimanna said that he wouldn’t attribute their absence to any internal conflict but the NPP’s overall failure to address the growing grievances of the farming community.
Edirimanna said that in spite of promises, the NPP had pathetically failed to ensure a reasonable pricing formula for paddy. The President again promised to implement an efficient paddy purchasing scheme at the next harvesting season, the ex-MP said, adding that the government should be ashamed and accept responsibility.
Edirimanna stressed that the government’s vow to implement a mandatory price for different varieties of paddy remained just a promise.
News
Thousands march in Jaffna demanding international investigation into Chemmani
A demonstration was held in Jaffna on Sunday (14) demanding an international investigation into the Chemmani mass grave, which protesters said constitutes evidence of the genocide committed against Tamils, Tamil Guardian HAS reported.
The procession began near the United Nations office, close to the Kailasa Pillayar Temple in Nallur, and proceeded to Kittu Park, where it concluded with a public gathering. Protesters demanded an international inquiry into the 583 sets of human skeletal remains and other evidence recovered from the site.
The rally was organised jointly by the Tamil National Council and civil society organisations, which had called for the excavation, preservation and forensic analysis of Chemmani and other mass graves to be placed entirely under the responsibility of the United Nations, without intervention by the Sri Lankan state.
A party alleged to have been responsible for a crime cannot be expected to exercise exclusive control over the evidence needed to investigate it, the council argued ahead of the demonstration, warning that placing such material under the control of an alleged perpetrator creates a risk that evidence could be damaged or compromised, Tamil Guardian reported.
Alongside the Chemmani demands, the organisers had called for an independent international criminal investigation into the genocide of Tamils, the transfer of evidence to the International Criminal Court, the immediate release of political prisoners held under the Prevention of Terrorism Act and the repeal of that legislation, the withdrawal of the military from the North-East, the return of occupied land, and international recognition of the Eelam Tamil people’s right to self-determination.
News
FAC that sank last month recovered in salvage operation
The Sri Lanka Navy recovered its Fast Attack Craft P 4447 following a successful salvage operation, bringing a multi-stage emergency response to a close.
The craft sank during a routine patrol, on 15 August 2026, off Angulana, after colliding with a previously sunken bulk carrier. It was brought to the surface on 11 September from a depth of approximately 80 feet. It was subsequently towed to the Colombo Dockyard premises.
The initial phase of the operation, immediately following the incident, focused on search and rescue. A joint effort, involving the Navy, Air Force, Police, and local fishermen from Angulana, helped rescue of 11 crew members. The search and rescue phase drew to a close with the recovery of the remains of the Second in Command of the craft, on 4th September.
Following the search and rescue phase, specialised Navy diving and salvage teams launched a dedicated recovery phase against rough sea conditions and underwater challenges, adhering to strict safety protocols. The Navy’s marine, hull, electrical, and electronic engineering teams utilised specialised technical know-how and equipment to raise the vessel in stages, the Navy said.
Technical support and specialised expertise were also extended by the Sri Lanka Ports Authority and Colombo Dockyard PLC.

The salvaged FAC (pic courtesy SLN media)
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