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MADRID: Finance ministers from the Association of
Southeast Asian Nations (Asean) as well as China, Japan and South
Korea agreed Sunday on the minimum scale of a regional
foreign-reserve swap to prevent a recurrence of the 1997 to 1998
Asian financial crisis.
“We also agreed that the total
size of the multilateralized Chiang Mai Initiative [CMI] would be at
least 80 billion US dollars,” finance chiefs from the 10-member
Asean and three East Asian countries said in a joint statement after
concluding a meeting under the framework called Asean+3 here on
Sunday.
Of the total amount, Japan, China
and South Korea would contribute 80 percent, while the Asean
countries will pay the remaining amount.
“I am glad to inform that the
11th Asean+3 finance ministers’ meeting has come to a successful
conclusion,” Vietnam’s Finance Minister Vu Van Ninh, who
co-chaired the meeting with his Japanese counterpart, said at a
press conference.
The CMI is a regional financing
arrangement agreed by the 13 countries in 2000 to swap foreign
exchange reserves, mainly on bilateral basis, in order for use when
necessary to fight against speculative attacks on their currencies.
The multilateralized CMI is the
next step, as has been mapped out at the last Asean+3 meeting of
finance ministers in Kyoto, Japan last year. It would be a
self-managed reserved pooling arrangement governed by a single
contract.
After more than one year, Ninh
said the 13 finance ministers also agreed on key concepts of the
borrowing accessibility, the activation mechanism and other
elements.
“Based on the progress made
thus far on some of the key elements of the multilateralism of the
CMI, we are committed to further accelerate our work in order to
reach consensus on all of the elements,” the finance ministers
said.
Japanese Finance Minister Fukushiro
Nukaga said he expected the swap to be operational as early as 2009.
As another part of the efforts to
strengthen regional financial cooperation, Asean+3 finance
ministers said it would be indispensable to build a credible system
to monitor the economic and financial situation of the member
countries.
As a start, they agreed to
implement measures to strengthen the current economic review and
policy dialogue, such as increasing the frequency of the dialogues
and developing a standardized format for the provision of
necessary information data.
Ministers also gave an impetus to
the development of the Asian bond markets, endorsing a new roadmap,
which focused on four key areas, namely promoting issuance of local-
currency denominated bonds, improving regulatory framework and
improving related infrastructure for the bond markets.
“There are outstanding risks to
the global economy including the financial market turmoil and
inflationary pressures from food and energy. To overcome these
risks, mutual support in this region is extremely important,” Ninh
said.
The finance ministers said while
they remained positive about the long-term resilience of the global
economy, the short-term economic prospects have weakened.
“Risks to the outlook come from
the still unfolding events in financial markets, the potential
worsening of housing and credit cycles and inflationary pressures
driven by high energy and food prices,” they said in the joint
statement.
--Xinhua
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