ASEAN+3 finalize details of regional reserve pool to cope with crisis

[FarCenter]

May 04, 2009

Details of a sizeable foreign currency reserve pool among the Association of Southeast Asian Nations, China, Japan and South Korea (ASEAN+3) were finalized in Bali, Indonesia on Sunday, two years after the initiative was first introduced to combat emergent financial problems.

Finance ministers of the ASEAN+3 nations reached the agreement on all main components of regional reserve pool, known as Chiang Mai Initiative Multilateralization (CMIM), and it will be implemented before the end of this year.

The agreement on the CMIM includes "the individual country's contribution, borrowing accessibility, and the surveillance mechanism," said a statement issued after the finance ministers' meeting.

The total size of the CMIM is 120 billion U.S. dollars with the contribution portion between ASEAN and the Plus Three countries at20 percent versus 80 percent.

China and Japan will each contribute 38.4 billion U.S. dollars to the pool, while South Korea will contribute 19.2 billion dollars.

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This will help prevent the manipulation of Asian currencies by New York and London hedge fund speculators.