By GREG ANSLEY
CANBERRA - The prospect of an Anzac dollar took another dive yesterday as a key Australian parliamentary committee rejected proposals for a merged currency.
The House of Representatives economics committee also poured cold water on suggestions that Australia should adopt the US greenback or create an Asian version of the euro with other countries in the region.
The arguments for an Anzac dollar or some other currency merger were presented during the committee's inquiry into international financial markets and their impact on Australia.
Support for a transtasman currency has been growing over the past two years, especially in New Zealand. Treasurer Peter Costello has already said New Zealand could adopt the Australian dollar if it wished.
The committee's report said the Reserve Bank's view was that since the costs and benefits of an Anzac dollar fell to the smaller country, Australia was leaving the running to New Zealand.
The committee was not convinced that Australia would benefit from a regional currency union, it said.
But that would not preclude New Zealand pegging its currency to Australia's.
The committee also rejected adopting the US dollar, an idea tentatively canvassed by the Australian Stock Exchange.
Some South American countries are considering the notion. It has also been floated in New Zealand.
The exchange also suggested that Australia should consider joining any regional Asian currency that might emerge from a study underway in the Association of Southeast Asian Nations.
A regional currency would reduce the incidence of currency crises, said the committee.
However, the disadvantage was that Australia would have to surrender its independent monetary policy.
If Australia were the smaller country - with the adoption of the $US, for example - it would require acceptance of the larger country's policy and would mean the loss of revenue from minting.
More importantly, the committee said, it would mean the loss of a useful way to deal with relative price differentials between regions - normally absorbed through variations in exchange rates.
If there was a common currency these differentials would need to be dealt with by a myriad of individual price adjustments.
But the committee said Australian policymakers should still monitor the euro as an example of merged currencies.
Anzac dollar fails to sway House group
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