Currency pluralism in Asia in the Period of the Corona-Crisis

The growing interest in this topic is partly a result of the increasing attention that countries are turning to sovereign monetary systems, payment systems and e-settlements due to international sanctions towards Russia and some Asian countries as well as the necessity to overcome the negative impacts of the COVID-19 crisis. The research focuses on regional and international monetary relations and is aimed at creating hedging mechanisms of financial risks and decreasing volatility of exchange rates to stabilize both balance of trade and current-account balance. The paper investigates the approaches to diversify currency risks of the countries subject to various sanctions and accompanied by the COVID-19 crisis by means of an increasing use of national currencies in cross-border transactions within the regions. The objective of the research is to develop recommendations for Asian and Russian fiscal and monetary policy authorities and central banks in the form of analytical materials that would systemize the operations of the national currencies’ offshore markets. The practical significance of the paper is the opportunities provided by an increasing use of the leading Asian and Russian currencies to incentivize the bypass channels of incoming capital, evading international sanctions and overcoming the COVID-19 crisis. The theoretical relevance of the study is to enrich the toolkit of offshore national forwards for stabilizing exchange rate policy in the context of the COVID-19 crisis. The findings and conclusions bring new insights into the role of offshore markets which allow the sanctioned countries to solve their current problems and overcome the COVID-19 crisis based on the growing pluralism of the world monetary system.

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