By NNN-KUNA
Tokyo : Thirteen Asian finance ministers agreed on Saturday to pool their foreign exchange reserves to avoid speculative attacks like the 1997-1998 Asian currency crisis.
At the one-day meeting in the ancient Japanese capital of Kyoto, finance chiefs from the 10-member Association of Southeast Asian Nations (ASEAN) along with China, Japan and South Korea (ASEAN 3), agreed to upgrade the current regional network of bilateral currency swaps worth about USD 80 billion toward a multilateral framework.
“We unanimously agreed in principle that a self-managed reserve pooling arrangement governed by a single contractual agreement is an appropriate form of multilateralization,” the ministers said in a joint statement.
Thai Finance Minister Chalongphob Sussangkarn, who chaired the ASEAN 3 meeting, told a joint news conference that the details need to be studied further.
Japanese Finance Minister Koji Omi also emphasized the significance of the agreement, saying, “This is very big progress and it is a major achievement that all 13 nations reached an agreement on the matter.”
The ministerial talks was held on the sidelines of the 40th annual meeting of the Asian Development Bank that opens Sunday.
To prevent a recurrence of the Asian financial crisis a decade ago, which had battered the economies of most countries in the region, 13 Asian nations forged bilateral currency swap agreements under the Chiang Mai Initiative (CMI) in May 2000, promising to help one another if a partner’s currency plunges.
The group currently has 16 bilateral swap agreement. ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The ministers welcomed continued strong growth in the regional economy. “The growth outlook for 2007 remains favorable and the external environment is broadly supportive of regional economic expansion,” they said in the statement.
However, the Asian financial leaders pointed out potential downside risks including a slowdown in major world economies, large global imbalances, greater finanical market volatility and rising oil prices.
The financial chiefs also welcomed the diversification of issuers and types of local currency bonds and back studies for a more liquid Asian bond market. The next ASEAN-plus-three meeting will be held in Madrid, Spain in 2008.