Analysis of single currency implementation in ASEAN+3

This research aims to analyze the feasibility of implementing single currency policy in ASEAN+3 countries such as Indonesia, Singapore, Malaysia, Thailand, Philippines, Myanmar, Laos, Cambodia, Brunei Darussalam, Vietnam, China, South Korea, and Japan based on annual data from 1993 to 2017. In this research, the panel data is analyzed using Pooled Least Square regression model and Moving Average forecasting method to predict optimum currency area indices of ASEAN+3 in the period of 2018 to 2022. The results showed that (1) ASEAN+3 region is not ready to implement single currency policy because of an increasing trend of asymmetric shock, lack of business cycle synchronization, and differences in production structure, trade relations, and economy size among ASEAN+3 countries. (2) There are four converged country pairs, which mean higher feasibility of forming optimum currency area for the four country pairs; Brunei Darussalam and Singapore have the most symmetrical foreign exchange volatility among the other country pairs