The Indian proposal was taken up on Friday by foreign ministers as they began a two-day meeting to pave the way for the 12th summit of the seven-nation South Asian Association for Regional Co-operation (Saarc).

Pakistan, which considers the single currency idea as positive but premature, had the item deleted from the final report of the foreign ministers' meeting yesterday, the official told AFP on condition of anonymity.

"Pakistan believes the Indian move is politically far-fetched."

The ministers wrapped up their talks yesterday after finalising key agreements, including on free trade and terrorism, to go before the leaders of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka from Sunday.

Pakistani Prime Minister Zafarulla Jamali is due to open the three-day summit on Sunday morning.