Tuesday 29 December 2009


ASIAN CURRENCY UNION
Multilateral Cooperation Aims to Fend Off Regional Crisis

The Korea Times, December 29, 2009

It is encouraging news that 13 Asian countries have signed a $120-billion currency swap deal to better cope with short-term liquidity volatility arising from external shocks. On Monday, finance ministers and central bank governors of 10 states of the Association of Southeast Asian Nations (ASEAN) plus South Korea, China and Japan announced the signing of the regional cooperation pact.

The agreement calls for a multilateral financial support program that is scheduled to make its debut on March 24. It is based on the Chiang Mai Initiative in which Korea, China, Japan and five ASEAN countries agreed in 2000 to support each other with dollar liquidity on a bilateral basis in times of crisis. The eight countries agreed on the $78-billion currency swap deal after the outbreak of the 1997-98 Asian financial turmoil.

The initiative was a direct reflection of the Asian turbulence that forced several countries including Korea, Thailand and Indonesia to go cap in hand for rescue packages arranged by the International Monetary Fund (IMF). Since then, countries in Asia felt the urgent need for regional cooperation to cushion external financial shocks. So, they launched the initiative, but it somehow felt incomplete due to participation by only a limited number of countries.

(...) [artículo aquí]

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