ASEAN·Han-Jung-Il Deputy Finance Ministers... "Let's Discuss Introducing Regional Loan Program"

'Meeting of Finance Vice Ministers and Central Bank Deputy Governors of Korea, China, and Japan'
'ASEAN+3 (Korea, China, Japan) Meeting of Finance Vice Ministers and Central Bank Deputy Governors' Held

The Association of Southeast Asian Nations (ASEAN) and the finance vice ministers of Korea, China, and Japan have agreed to strengthen cooperation to enhance regional financial stability. They decided to specifically review the introduction of a loan program to improve the effectiveness of the ASEAN+3 currency swap (CMIM - Chiang Mai Initiative Multilateralization).

According to the Ministry of Economy and Finance on the 21st, the "Korea-China-Japan Finance Vice Ministers and Central Bank Deputy Governors Meeting" and the "ASEAN+3 (Korea-China-Japan) Finance Vice Ministers and Central Bank Deputy Governors Meeting" were held in Bali, Indonesia from the 29th to the 30th of last month. The meetings were attended by finance vice ministers and central bank deputy governors from 12 countries, including the three countries of Korea, China, and Japan, and nine ASEAN countries, as well as key officials from the regional macroeconomic surveillance organization (AMRO) and the Asian Development Bank (ADB).

The participants reached a consensus on the need to review the financial structure, loan programs, and loan interest rates to ensure the smooth operation of the CMIM. The CMIM is a multilateral currency swap established in March 2000 by the 10 ASEAN countries and the three countries of Korea, China, and Japan to prepare for potential foreign exchange liquidity shortages that may arise during financial crises in the region. When a regional country requests, it exchanges US dollars for the local currency of that country. However, the CMIM does not have a pooled loan fund; instead, it sets the maximum amount each participating country can lend in an emergency.

Kim Sung-wook, Korea’s chief representative and Director General for International Economic Affairs, agreed with this macroeconomic diagnosis and emphasized the need to strengthen the effectiveness of the current discussions on the regional CMIM to ensure financial stability in the region. The participants diagnosed that continuous monitoring is necessary regarding the impact on the region of ongoing US monetary tightening, the slowing pace of China’s economic recovery, and increasing financial market uncertainties in the US and Europe.

Additionally, the participants reported on future work plans related to regional financial cooperation, which began with four working groups including fintech in the second half of 2021. The matters discussed at this vice ministers’ meeting will be finalized through the upcoming meetings of finance ministers and central bank governors of Korea, China, Japan, and ASEAN+3, scheduled to be held in Songdo, Incheon in May.

This content was produced with the assistance of AI translation services.