Global Biz
Asia's regional currency swap plan takes effect
(Xinhua)
Updated: 2010-03-24 16:25
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BEIJING - A currency swap agreement between China, Japan, the Republic of Korea (ROK) and the 10-member Association of Southeast Asian Nations (ASEAN) came into effect Wednesday.
The currency swap agreement, or the Chiang Mai Initiative Multilateralization (CMIM) agreement, totaled $120 billion, said a statement posted Wednesday on the website of the People's Bank of China, China's central bank.
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The CMIM agreement aimed to provide financial support to the CMIM participant countries who face short-term liquidity shortages, according to the statement.
Under the CMIM agreement, China, Japan, the Republic of Korea, and the 10-member ASEAN countries will be able to swap their currencies with US dollars for an amount proportionate to their contribution to the regional reserve pool in case of a liquidity shortage, the statement said.
China and Japan contributed $38.4 billion each to the liquidity pool and the ROK offered $19.2 billion. The 10 ASEAN nations provided a combined $24 billion, according to the statement.
The ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
