Seoul - In a significant move to bolster financial cooperation, vice finance ministers and central bank representatives from South Korea, China, Japan, and the Association of Southeast Asian Nations (ASEAN) have agreed to enhance a currency swap mechanism. The decision was made during a two-day meeting in Kanazawa, Japan, which concluded on Wednesday, as reported by South Korea's Ministry of Economy and Finance.
According to Yonhap News Agency, The officials agreed to initiate the Rapid Financing Facility (RFF) under the Chiang Mai Initiative Multilateralization (CMIM) agreement, aiming to provide quick financial assistance to member countries in urgent balance of payments crises. The RFF is expected to be officially approved in a ministerial meeting next year.
The CMIM, established in 2010, is a multilateral currency swap arrangement among the ASEAN+3 nations. It is designed to offer liquidity support to member countries during financial crises. The fund totals $240 billion, with South Korea's contribution amounting to $38.4 billion.
Deputy Finance Minister Choi Ji-young of South Korea emphasized the importance of making the regional financial safety net practically beneficial for member nations. South Korea, as the co-chair for the upcoming year, plans to actively lead discussions on reform measures. The next ASEAN+3 Finance Ministers' and Central Bank Governors' Meeting is scheduled for May 2024 in Tbilisi, Georgia.