Asian multilateral currency swap deal to be launched in March

SEOUL, Dec. 28 (Yonhap) -- An US$120 billion regional currency swap agreement
involving 13 countries including South Korea, Japan and China will be launched in
March next year, South Korea's finance ministry said Monday.

According to the ministry, the pool of currency swap deals known as the Chiang
Mai Initiative Multilateralization will help the nations jointly deal with
external currency speculation and allow financially-troubled countries to borrow
foreign currency from others in the group.
The Chiang Mai Initiative (CMI) is a currency swap created in 2000 the aftermath
of the 1997-1998 Asian financial crisis.
Currently, South Korea, China, Japan and the five countries of the 10-member
Association of Southeast Asian Nations (ASEAN) have bilateral currency swap
agreements. But the remaining five ASEAN member countries -- Vietnam, Cambodia,
Laos, Brunei and Myanmar -- will be able to use part of the fund when they face
short-term liquidity difficulties, according to the ministry.
Under the currency swap agreements, each country is entitled to swap its local
currency with the U.S. dollar for an amount up to its contribution multiplied by
its respective purchasing multiplier, it said.
South Korea will contribute $19.2 billion to the fund, according to the ministry.
Japan and China will also chip in $38.4 billion each, with the remainder of $24
billion will be shared by the 10 member countries of the ASEAN.
The combined deals, which are on a bilateral basis, reached $78 billion.
sam@yna.co.kr
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