Emerging East Asian economies must coordinate their foreign exchange rate policies in the face of likely continued appreciation of their currencies next year, the Asian Development Bank said.

The region's currencies are under increasing pressure to rise as a result of their faster economic turnaround, it said.

"In both nominal and real terms, several currencies have gained significant value against their trading partners since March this year, while some others have effectively depreciated as they have tracked US dollar movements," the ADB said in the December issue of its semiannual publication Asia Economic Monitor.

"A coordinated regional exchange rate strategy should be explored," the ADB said. It added that this would bolster intraregional trade and lower the fear of losing export competitiveness between neighbors.

The Manila-based multilateral lender, however, doesn't have a specific recommendation on how countries can achieve such a coordinated policy.

"This is more a political, than economic, decision," Lei Lei Song, an economist at the ADB's Office of Regional Economic Integration, told Dow Jones Newswires in a telephone interview.

"This is a very difficult issue and it may need some countries to take the initiative to discuss these issues."

"The Chinese economy is the biggest in the region after Japan. If China could take the initiative to discuss at least at the policy makers' level, then it would be much easier for regional cooperation to go forward to the next level," Song said.

Last month, the finance ministers of the 21 members of the Asia Pacific Economic Cooperation group, which includes the US, China and Japan, agreed that flexible prices, including exchange rates and interest rates, are important to achieving sustainable global growth.

Within the Association of Southeast Asian Nations plus China, Japan and South Korea grouping, there are encouraging signs.

"The Chiang Mai Initiative Multilateralization (CMIM) will be operational very soon. That can be a foundation because through CMIM and through the regional surveillance mechanism, policy makers can start to discuss very detailed policy issues in the region. They may use that forum also to discuss some urgent issues like exchange rate policy and capital flows," said Song.