ID :
46944
Sun, 02/22/2009 - 19:22
Auther :
Shortlink :
https://www.oananews.org//node/46944
The shortlink copeid
(LEAD) Asian countries agree to expand regional currency fund to US$120 bln
SEOUL, Feb. 22 (Yonhap) -- Finance chiefs of Asian countries agreed to expand the size of their regional currency swap fund to $120 billion in a bid to better cope with a regional financial crisis, Seoul officials said Sunday.
The fund is a bilateral swap arrangement created by 10 ASEAN countries plus South
Korea, China and Japan under the Chiang Mai Initiative in the wake of the 1997
Asian financial meltdown to tackle short-term liquidity problem in the region.
The current size of the fund stands at $80 billion.
They also agreed to transform the fund into a multilateral swap mechanism,
through which all countries can get financial support when they are in trouble
without bilateral swap agreements.
The agreement was made at a meeting held in Thailand, among finance ministers of
the member countries, according to the Ministry of Strategy and Finance.
The move comes as those countries represented at the meeting shared the need for
closer cooperation in the face of ongoing global financial turbulences. The fund
is regarded as the Asian version of the International Monetary Fund.
"The current severe economic downturn of the global economy coupled with
heightened risk aversion in financial markets has adversely affected the region,"
participants said in a joint statement.
"We believe that proactive and decisive policy actions are required in order to
restore confidence, financial stability and promote a sustainable economic growth
in the region," they said.
Seoul's Finance Minister, who co-chaired the meeting, said that the expansion of
the fund will "greatly" help Asian countries strengthen regional cooperation and
overcome the deepening global financial crisis.
South Korea secured additional safety net for a possible financial crisis. It
signed a $30 billion bilateral swap arrangement with the U.S. last year and
recently expanded similar swap pipelines with Japan and China.
The news came as the nation's local currency markets are hard-hit by a growing
credit crisis, with rumors circulating over a possible foreign capital exodus
from local bond and stock markets. On Friday, the won plunged to a three-month
low against the U.S. dollar.
The government brushed off the market rumor, saying that its current account
balance is improving and it has stockpiles of foreign reserves enough to cope
with any contingency. The nation's foreign reserves stood at $201.74 billion as
of the end of January.
kokobj@yna.co.kr
(END)
The fund is a bilateral swap arrangement created by 10 ASEAN countries plus South
Korea, China and Japan under the Chiang Mai Initiative in the wake of the 1997
Asian financial meltdown to tackle short-term liquidity problem in the region.
The current size of the fund stands at $80 billion.
They also agreed to transform the fund into a multilateral swap mechanism,
through which all countries can get financial support when they are in trouble
without bilateral swap agreements.
The agreement was made at a meeting held in Thailand, among finance ministers of
the member countries, according to the Ministry of Strategy and Finance.
The move comes as those countries represented at the meeting shared the need for
closer cooperation in the face of ongoing global financial turbulences. The fund
is regarded as the Asian version of the International Monetary Fund.
"The current severe economic downturn of the global economy coupled with
heightened risk aversion in financial markets has adversely affected the region,"
participants said in a joint statement.
"We believe that proactive and decisive policy actions are required in order to
restore confidence, financial stability and promote a sustainable economic growth
in the region," they said.
Seoul's Finance Minister, who co-chaired the meeting, said that the expansion of
the fund will "greatly" help Asian countries strengthen regional cooperation and
overcome the deepening global financial crisis.
South Korea secured additional safety net for a possible financial crisis. It
signed a $30 billion bilateral swap arrangement with the U.S. last year and
recently expanded similar swap pipelines with Japan and China.
The news came as the nation's local currency markets are hard-hit by a growing
credit crisis, with rumors circulating over a possible foreign capital exodus
from local bond and stock markets. On Friday, the won plunged to a three-month
low against the U.S. dollar.
The government brushed off the market rumor, saying that its current account
balance is improving and it has stockpiles of foreign reserves enough to cope
with any contingency. The nation's foreign reserves stood at $201.74 billion as
of the end of January.
kokobj@yna.co.kr
(END)
