Japan to offer $38.4 bln to pool
NUSA DUA: Japan will contribute 38.4 billion dollars to an Asian emergency currency pool to bolster state finances amid the global economic slump, Finance and Economy Minister Kaoru Yosano said.
He made the announcement after meeting the finance ministers of China and South Korea on the Indonesian island of Bali, where the Asian Development Bank is holding its annual governors' meeting.
The pool, known as the Chiang Mai Initiative, aims to create a network of bilateral swap arrangements among the countries of the Association of Southeast Asian Nations (ASEAN) as well as China, Japan and South Korea, or ASEAN+3.
Yosano said China would also offer 38.4 billion dollars to the initiative, of which the "basic idea is that Japan, China and Korea cooperate to provide support to ASEAN nations."
The ASEAN+3 nations have decided that ASEAN's 10 member states would contribute 20 percent to the initiative worth 120 billion dollars while Japan, China and South Korea would supply the rest.
In addition, Yosana said Japan was considering a scheme to offer yen swaps worth up to six trillion yen (60.4 billion dollars) to be tapped in emergencies, as well as guarantees on certain yen denominated bonds.
During the talks, the three ministers also agreed to accelerate discussions on setting up a surveillance unit to monitor the functioning of the Chiang Mai Initiative.
The pool can be called upon to ease liquidity trouble as it boosts the amount of foreign currency that regional banks can access while helping companies that use currencies such as the yuan when trading.
Yosano called for strengthened cooperation within Asia to tackle the severe effects of the global financial crisis, which has hit regional exports to markets such as the European Union and the United States.
He said the region had to restructure its economies to "focus on domestic demand" as export-driven growth stalls or goes into reverse.