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14 April 2024

Asia FX swap pool to cross $80bn

By Reuters

Finance ministers from 13 east Asian countries plan to announce later this month the launch of an emergency fund worth far more than $80 billion (Dh294bn) after holding a special meeting in Thailand, South Korea said yesterday.

Many of the east Asian countries sealed bilateral currency swap agreements under the Chiang Mai Initiative (CMI) but later agreed to transform the individual agreements into a single fund.

"An agreement has been reached to expand the CMI mutual fund by a considerable size from (the originally proposed) $80bn and it will be officially announced at the meeting," Deputy Finance Minister Shin Je-yoon said.

He did not give the expanded size of the fund, proposed by the 13 countries in May last year to help member countries avoid temporary shortages in dollar funding, but a newspaper in Seoul previously put the new value at $120 billion.

China, South Korea and Japan have pledged to contribute 80 per cent of the fund, with the 10 Asean member countries taking up the rest.

Shin said finance ministers from the 10 members of the Association of Southeast Asian Nations (Asean), Japan, China and South Korea plan to meet in Phuket, Thailand, on Feb. 22 to evaluate the scope of the global financial and economic turmoil.