Easing currency swap conditions for ASEAN bankers?
(Indonesia) - Southeast Asian central banks want to see IMF conditions relaxed in using an Asian currency swap system.
They are also reportedly looking to Europe's example of a single currency and regional central bank as one that may suit Southeast Asian market conditions.
Central Bank Governors in the region are apparently uneasy with IMF conditions wrapped around a network of central bank currency swaps being established among Southeast Asian nations and three of Asia's strongest economic powers. Under these conditions countries can draw a maximum of 10 percent of the swap facilities at any one time, with further withdrawals conditional on performance against IMF programmes country by country.
The network is being established among Japan, China and South Korea and 10 country ASEAN under the Chiang Mai Initiative, with the three non-ASEAN countries having asked for the IMF's conditions to be an integral part of the arrangement.
The goal of the program is to make foreign exchange reserves available at short notice to countries facing a rapid deterioration in its balance of payments and whose currency may come under speculative attack.
Central Bank Governors in the region are apparently uneasy with IMF conditions wrapped around a network of central bank currency swaps being established among Southeast Asian nations and three of Asia's strongest economic powers. Under these conditions countries can draw a maximum of 10 percent of the swap facilities at any one time, with further withdrawals conditional on performance against IMF programmes country by country.
The network is being established among Japan, China and South Korea and 10 country ASEAN under the Chiang Mai Initiative, with the three non-ASEAN countries having asked for the IMF's conditions to be an integral part of the arrangement.
The goal of the program is to make foreign exchange reserves available at short notice to countries facing a rapid deterioration in its balance of payments and whose currency may come under speculative attack.
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