Finance leaders of 13 Asian nations, including Cambodia, have approved to increase the “delinked portion” of the $240 billion Chiang Mai Initiative Multilateralisation (CMIM) cash swap fund from 30 percent to 40 percent of borrowing capacity.
The approval was made on Friday at the 23rd Asean+3 Finance Ministers and Central Bank Governors’ Meeting held “virtually” because of the COVID-19 pandemic, and was co-chaired by Japan and Vietnam.
The increase means all 10 Asean nations, as well as, Japan, South Korea and China can now access up to 40 percent of their maximum borrowing amount from the facility without the need for any conditions on the funds provided.
The CMIM was implemented in 2010 as a means of addressing balance of payments and short term liquidity difficulties in the region during times of financial crises, by allowing members to access a pool of US dollars in exchange for their own currencies.
In addition, to further assisting accessibility of emergency cash swaps at the meeting members also approved to “institutionalise voluntary and demand-driven [cash swaps] for both requesting and providing parties, [assisting] local currency contributions in the CMIM” and will “clarify the CMIM Conditionality Framework for the IMF de-linked portion to enable the smooth implementation of the CMIM arrangement.”
According to a joint statement released after the meeting, member nations also said they wanted to further enhance regional economic and financial stability during the COVID-19 pandemic through prompting key regional initiatives.
“This year marks the 10th anniversary of the original CMIM agreement coming into effect in 2010. In the past decades, Asean+3 members have put in tireless efforts in upgrading the CMIM as a reliable self-help mechanism in the Asean+3 region, and establishing it as an important component in the global financial safety net. The historical achievements reached at today’s meeting will help further enhance the relevance as well as operational readiness of the CMIM,” the statement read.
“In the face of the COVID-19 pandemic, the finance ministers and governors also recognised the ongoing need for a stronger and more capable Asean+3 Macroeconomic Research Office (AMRO) as a “trusted family doctor” to support Asean+3 members. We commend AMRO’s timely analyses and updates on the impact of the pandemic on the region, which have served as valuable references for members’ policymaking,” it added.
The president of the Asian Development Bank (ADB), the director of the ASEAN+3 Macroeconomic Research Office (AMRO), the secretary-general of Asean and the deputy managing director of the International Monetary Fund (IMF) also attended the meeting.
The 24th meeting is planned to be held in Tbilisi, Georgia, and co-chaired by Brunei and South Korea in 2021.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.