Tokyo, 4 May, /AJMEDIA/
The Association of Southeast Asian Nations plus Japan, China and South Korea on Friday agreed to provide each other funds in times of emergency such as pandemics and natural disasters, building on their existing currency swap arrangements for the U.S. dollar and its counterparts.
The finance ministers and central bank governors of the Asian nations met on the fringes of events hosted by the Asian Development Bank in Georgia’s Tbilisi, at a time when the dollar has gained strength relative to its counterparts following aggressive monetary tightening to fight inflation.
A strong dollar means greater debt burden for countries that hold dollar-denominated debts.
“Asia is prone to natural disasters and ASEAN nations, in particular, have had high hopes for the new facility that would enable us to respond quickly to external shocks,” Japanese Finance Minister Shunichi Suzuki told a press conference after the meeting.
“Our agreement on the launch is a major accomplishment,” he said, citing the need for cooperation to ensure financial stability.
The “ASEAN Plus Three” group had agreed to boost their safety net under the Chiang Mai initiative, created in the aftermath of the 1997 Asian financial crisis, to provide emergency liquidity.
The COVID-19 pandemic has increased the necessity of responding to funding needs more speedily and boosting financial cooperation among the group.
Separately, the finance chiefs of Japan, China and South Korea held a meeting to discuss the financial situation.
Japan and 11 Pacific island nations also held their first finance ministers’ meeting ahead of their leaders’ summit in July in Tokyo, covering a range of topics from climate change to debt sustainability.
ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
© KYODO
