The Asian Clearing Union (ACU) is a regional payments clearing system that facilitates the settlement of payments among the member countries in their local currencies. The ACU was established in 1974 by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) to promote regional trade and economic cooperation among the member countries. The ACU is headquartered in Tehran, Iran, and has 9 member countries, including Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.
The ACU operates as a multilateral clearinghouse, where member countries settle their payments through a netting system. Under the netting system, the member countries’ import and export payments are consolidated into a single settlement amount, which is then settled in their respective local currencies. This allows the member countries to settle their trade payments without the need for foreign exchange transactions, which can reduce transaction costs and foreign exchange risks.
The ACU also provides other services, including the issuance of letters of credit and guarantees, the clearance of remittances and transfers, and the settlement of capital transactions. These services are provided to facilitate regional trade and investment among the member countries.
The ACU has played a significant role in promoting regional trade and economic cooperation among the member countries. The ACU has helped to increase the use of local currencies in regional trade, which has reduced the reliance on foreign currencies and improved the efficiency of cross-border trade. The ACU has also helped to promote greater economic integration and cooperation among the member countries, which has led to increased regional stability and prosperity.
In summary, the Asian Clearing Union is a regional payments clearing system that facilitates the settlement of payments among the member countries in their local currencies. The ACU has played a significant role in promoting regional trade and economic cooperation among the member countries and has helped to increase the use of local currencies in regional trade.