ASEAN+3 agree to use crisis fund to back Asian economy

ASEAN+3 agree to use crisis fund to back Asian economy

Kazuo Kodama (R), Press Secretary of Japanese Foreign Minister, briefs on the ASEAN+3 meeting and meetings between Japanese Prime Minister Taro Aso and leaders attending the ASEM meetings on the sidelines of the seventh Asia-Europe Meeting (ASEM) in Beijing, in the ASEM7 Press Center in Beijing International Hotel, Beijing, on Friday, Oct. 24, 2008. The ASEM7 summit kicked off in Beijing Friday afternoon.(Xinhuanet/Yangtze Yan)



BEIJING, Oct. 24 (Xinhuanet) -- Leaders of the ASEAN countries and China, Japan, South Korea (ASEAN+3) have reached agreement on an 80 billion U.S. dollar foreign-exchange reserve pool to be used as a countermeasure to defend currencies and backstop Asian economies amid the global financial crisis, a Japanese official said Friday.

The operation details and the timeline of the crisis fund, however, is still under discussion, Japanese Foreign Ministry press secretary Kazuo Kodama said at a press briefing on the sidelines of the seventh Asia-Europe Meeting (ASEM).

The agreement essentially firms up an earlier commitment in May by ASEAN+3 leaders, superseding the Chiang Mai Initiative, which came into being in 2000 in the wake of the 1997/98 East Asian financial crisis to ease mainly bilateral currency swaps, according to Kodama.

Meanwhile, the crisis fund will defend regional currencies and could see its mandate widened to cover domestic liquidity issues, ASEAN Secretary General Surin Pitsuwan was quoted as saying at the conclusion of the ASEAN+3 leaders meeting Friday. Pitsuwan also denied a specific timeline for the set-up of the fund by next June as revealed by news reports.

The East Asian countries began talks in 2006 on transforming the Chiang Mai Initiative into a more powerful and multilateral reserve pooling mechanism.

In May they reached preliminary agreement to create a foreign exchange reserve pool of 80 billion dollars. The initial agreement called for China, Japan and South Korea to provide 80 percent or 64 billion dollars, with ASEAN members providing the remaining 16 billion.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The ASEAN+3 leaders met prior to the Asia-Europe Meeting (ASEM) summit held in Beijing Friday and Saturday.

By Yangtze Yan