Chiang Mai Initiative
The Chiang Mai Initiative (CMI) is a multilateral
The initiative began as a series of bilateral swap arrangements after the
History
Conception
At the height of the
Early critics questioned the reasoning behind the initiative. The
Expansion
As of 16 October 2009, the network consisted of 16 bilateral arrangements among the ASEAN Plus Three countries worth approximately US$90 billion. Additionally, the ASEAN Swap Arrangement had a reserves pool of approximately US$2 billion.[12]
Multilateralisation
In May 2007, at the 10th meeting of ASEAN+3 Finance Ministers the CMI further progress was agreed upon.[citation needed]
Foundation of CMI was meant to expand bilateral swaps of ASEAN. In addition, it was to aid the existing financial facilities of IMF. Nonetheless, the
In February 2009, ASEAN+3 agreed to expand the fund to $120 billion up from the original level of $78 billion proposed in 2008.[14][15]
During the April 2009 meeting of ASEAN finance ministers in
On 3 May 2012, 15th ASEAN+3 Finance Ministers and Central Bank’s Governors’ meeting was held in Manila, Philippines which made an agreement about expanding CMIM from current $120 billion to 240 billion. The ASEAN+3 also agreed to adopt the CMIM Precautionary Line (CMIM-PL), which is designed on the model of PPL program within the IMF to prevent the financial crisis. In addition, IMF de-linked portion is raised from 20 percent to 30 percent and with its future goal of reaching 40 in the year 2014. Regarding the expanded funding of CMIM, countries now can receive up to $30 billion.[21]
The Chiang Mai Initiative Multilateralisation (CMIM) Agreement was signed on 28 December 2009,[22][23] and took effect on 24 March 2010.[24][25]
Participants
Bloomberg estimated that participants of the Chiang Mai Initiative held more than US$4.1 trillion of foreign exchange reserves in 2009.[27][28]
Flag | Country | Currency | Central bank | 2013 Nominal GDP (millions of US$) |
2013 PPP GDP (millions of US$) |
Financial contribution[29] (millions of US$) |
Maximum borrowing (millions of US$) |
---|---|---|---|---|---|---|---|
China and Hong Kong | yuan and dollar | People's Bank of China and Hong Kong Monetary Authority | 9,300,911[Note 1] | 14,009,813[Note 2] | 38,400[Note 3] | 19,200 | |
Japan | yen | Bank of Japan | 5,149,897 | 4,778,523 | 38,400 | 19,200 | |
South Korea | won | Bank of Korea | 1,258,586 | 1,687,138 | 19,200 | 19,200 | |
Indonesia | rupiah | Bank Indonesia | 946,391 | 1,314,660 | 4,770 | 11,925 | |
Thailand | baht | Bank of Thailand | 424,985 | 701,554 | 4,770 | 11,925 | |
Malaysia | ringgit | Bank Negara Malaysia |
327,911 | 532,515 | 4,770 | 11,925 | |
Singapore | dollar | Monetary Authority of Singapore | 286,925 | 338,551 | 4,770 | 11,925 | |
Philippines | peso | Bangko Sentral ng Pilipinas | 284,472 | 457,314 | 3,680 | 9,200 | |
Vietnam | đồng | State Bank of Vietnam | 155,952 | 343,024 | 1,000 | 5,000 | |
Cambodia | riel | National Bank of Cambodia | 15,672 | 39,734 | 120 | 600 | |
Myanmar (Burma) |
kyat |
Central Bank of Myanmar | 57,439 | 96,812 | 60 | 300 | |
Brunei Darussalam | dollar | Brunei Currency and Monetary Board |
16,451 | 22,305 | 30 | 150 | |
Laos | kip | Bank of the Lao People's Democratic Republic | 10,262 | 21,083 | 30 | 150 |
- Notes
- ^ The individual nominal GDP of the People's Republic of China and of Hong Kong are US$9,020,309 million and US$280,682 million respectively.
- ^ The individual PPP GDP of the People's Republic of China and of Hong Kong are US$13,623,255 million and US$386,558 million respectively.
- ^ Hong Kong's US$4,200 million contribution is included in that of the People's Republic of China.
ASEAN
Country | Foreign exchange reserves (US$) |
Figure as of |
---|---|---|
Brunei Darussalam | 50,000,000,000 | December 2007[30] |
Cambodia | 3,732,000,000 | Dec 2012[31] |
Indonesia | 107,269,160,000 | Apr 2013[32] |
Laos | 822 | Dec 2012[33] |
Malaysia | 140,312,200,000 | Apr 2013[34] |
Myanmar (Burma)
|
3,600,000,000 | November 2009[35] |
Philippines | 83,951,540,000 | Mar 2013[36] |
Singapore | 261,678,000,000 | Apr 2013[37] |
Thailand | 177,803,000,000 | Mar 2013[38] |
Vietnam | 20,900,000,000 | Dec 2012[39] |
This section needs expansion. You can help by adding to it. (January 2010) |
People's Republic of China
China holds the world's largest foreign exchange reserves, which reached US$1 trillion in November 2006.
Japan
Japan possesses the second largest foreign exchange reserves.[24] It became the second country to reach US$1 trillion in reserves in February 2008. In contrast to China, which places "stringent" control on its currency, the Japanese government has not placed any control on the yen since 2004.[44] The reserves reached US$1.06 trillion in October 2009.[45]
South Korea
South Korea ranked sixth in foreign exchange reserves, which reached US$270.9 billion in November 2009.[45] It accounted for 6.4 percent of the total ASEAN Plus Three reserves and 8 percent of the combined gross domestic product of the participating countries in 2009.[46] The Korea Times wrote in an editorial that the country should act as a mediator between China and Japan, whose equal contributions meant that both "should refrain from racing for regional hegemony in the cooperative grouping".[47]
Further reading
- Grimes, William W., The Asian Monetary Fund Reborn? Implications of Chiang Mai Initiative Multilateralization (Asia Policy, January 2011)
- Lipscy, Phillip Y., Japan's Asian Monetary Fund Proposal (Stanford Journal of East Asian Affairs, Spring 2003)
See also
Notes
- ^ "The News International: Latest News Breaking, Pakistan News".
- ISBN 9780141024967.
- ^ a b "Focusing the Fund on Financial Stability". Far Eastern Economic Review. 14 June 2001. pp. 48–50. Archived from the original on 17 December 2001. Retrieved 14 March 2010.
- ^ Lipscy, Phillip Y. "Japan's Asian Monetary Fund Proposal." Stanford Journal of East Asian Affairs 3(1): 93-104
- ^ "ASEAN, China, Japan, S.Korea Agree on Currency Swap". People's Daily. 7 May 2000. Retrieved 3 January 2010.
- ^ Crampton, Thomas (8 May 2000). "East Asia Unites to Fight Speculators". The New York Times. Archived from the original on 30 April 2013. Retrieved 3 January 2010.
- Manila Standard. Associated Press. 8 May 2000. pp. 1–2.
Countries would lend dollars to each other to help defend the value of their currencies during speculative attacks or other currency problems. The loans would be paid back in local currencies at a fixed rate. It would complement existing international institutions, the statement said, acknowledging likely opposition from the United States if a deal eventually led to an attempt to replace the Washington based International Monetary Fund. Malaysia, which has long urged fellow Asian nations to rely on each other for help, rather than on the West, refused the IMF's treatment and suffered less in the crisis than others.
- ^ Mahboob-ul Alam, Chaklader (12 November 2009). "The Chiang Mai currency initiative". The Daily Star. Retrieved 2 January 2010.
- ^ "ASEAN Plus Three Cooperation Database" (PDF). Association of Southeast Asian Nations. 9 January 2009. Archived from the original (PDF) on 18 December 2014. Retrieved 5 June 2012.
- )
- )
- ^ "The Agreement on the Swap Arrangement under the Chiang Mai Initiative (as of October 16, 2009)" (PDF). Bank of Japan. 16 October 2009. Retrieved 4 January 2010.[permanent dead link]
- ^ Sussangkarn, Chalongphob (22 January 2015). "The Chiang Mai Initiative Multilateralization: Origin, Development and Outlook" (PDF). Asian Development Bank. Retrieved 3 April 2015.
- ^ "Action Plan to Restore Economic and Financial Stability of the Asian Region". ASEAN. 22 February 2009. Archived from the original on 13 November 2013. Retrieved 2 January 2010.
- ^ "Asia set to boost emergency fund". BBC News. 22 February 2009. Retrieved 2 January 2010.
- ^ "ASEAN countries agree on individual contributions to regional reserve pool". Xinhua News Agency. 9 April 2009. Archived from the original on 13 April 2009. Retrieved 3 January 2010.
- ^ Romero, Alexis Douglas B. (14 April 2009). "Planned regional fund faces delay". BusinessWorld. Vol. 22, no. 178. Retrieved 3 January 2010. [dead link]
- Tempo. Archived from the originalon 12 June 2009. Retrieved 3 January 2010.
- ^ "ASEAN, China, Japan, SKorea finalise crisis pact". Agence France-Presse. 3 May 2009. Retrieved 2 January 2010.
- ^ "The Establishment of The Chiang Mai Initiative Multilateralization (Joint Press Release)". Ministry of Finance (Singapore). 28 December 2009. Archived from the original on 24 December 2012. Retrieved 5 June 2012.
- ^ "ASEAN+3 Finance Ministers and Central Bank Governors' Meeting Successfully Concludes" (PDF). Ministry of Strategy and Finance (Korea). 3 May 2012. Archived from the original (PDF) on 30 April 2013. Retrieved 5 June 2012.
- ^ "Asean Members Sign Chiang Mai Initiative Multilateralization Agreement". Bernama. 28 December 2009. Archived from the original on 4 June 2011. Retrieved 2 January 2010.
- ^ "Chiang Mai Initiative multilateral accord signed". The Star. 29 December 2009. Retrieved 2 January 2010.
- ^ a b "Date set for currency swap". The Japan Times. 30 December 2009. Retrieved 1 January 2010.
- ^ Yoon, Ja-young (28 December 2009). "Asian Monetary Fund to Debut in March". The Korea Times. Archived from the original on 31 December 2009. Retrieved 2 January 2010.
- ^ "ASEAN+3's $120b swap deal put in place". The Jakarta Post. 29 December 2009. Archived from the original on 2 January 2010. Retrieved 2 January 2010.
- ^ Ito, Aki; Yong, David (28 December 2009). "ASEAN, Japan, China Form $120 Billion Reserve Pool". Bloomberg. Retrieved 5 January 2010.
- ^ Rajan, Ramkishen S. (14 December 2009). "Come closer, all Asians". The Financial Express. Retrieved 4 January 2010.
- ^ "The Establishment of the Chiang Mai Initiative Multilateralization" (PDF). Ministry of Finance (Japan). 28 December 2009. p. 2. Archived from the original (PDF) on 23 March 2011. Retrieved 4 January 2010.
- ^ Berthelsen, John (14 January 2008). "Asia Ponders Its Astounding Foreign Exchange Reserves". Asia Sentinel.
- ^ "Cambodia reserves top $3.5b". The Straits Times. Agence France-Presse. December 2012.
- ^ "Monetary Indicators". Bank Indonesia. 30 November 2009.
- ^ "Lao Monetary Statistics Q2 2009". Bank of the Lao People's Democratic Republic. December 2012.
- Bank Negara Malaysia. 30 November 2009.
- ^ Macan-Markar, Marwaan (30 November 2009). "Burma: Nobel Laureate Stiglitz to Advise Junta on Poverty". Inter Press Service.
- Central Bank of the Philippines. March 2013.
- ^ "Official Foreign Reserves". Monetary Authority of Singapore. 7 December 2009.
- ^ "Reserve Money and International Reserve Report". Bank of Thailand. March 2013.
- ^ Thomas, Beth; Nguyen, Dieu Tu Uyen (December 2012). "Vietnam to Use First Bond Sale in 4 Years for Energy". Bloomberg.
- ^ Schifferes, Steve (2 November 2006). "China's trillion dollar surplus". BBC News. Retrieved 4 January 2010.
- ^ Hamlin, Kevin; Li, Yanping; Worrachate, Anchalee; Kennedy, Simon; Hendry, Sandy; Carrigan, Justin (16 July 2009). "China $2 Trillion Reserves Keep U.S. Stimulus Afloat". Bloomberg. Retrieved 4 January 2010.
- ^ Wang, Aileen; Rabinovitch, Simon (4 January 2010). "China must invest forex in resources -c.bank official". Thomson Reuters. Retrieved 4 January 2010.
- ^ McCullough, Keith R. (28 December 2009). "China Charts Its Own Path". Forbes. Retrieved 2 January 2010.
- ^ Chen, Shu-Ching Jean (7 March 2008). "$1 Trillion In Forex Reserves Less Than It Seems For Japan". Forbes. Retrieved 4 January 2010.
- ^ a b Lee, Hyo-sik (2 December 2009). "Currency Reserves Hit Record High of $271 Bil". The Korea Times. Archived from the original on 28 July 2011. Retrieved 5 January 2010.
- ^ "Asian Currency Swap Fund to Guard Against Future Crises". The Chosun Ilbo. 29 December 2009. Retrieved 4 January 2010.
- ^ "Asian Currency Union". The Korea Times. 29 December 2009. Archived from the original on 18 September 2012. Retrieved 2 January 2010.
References
- Asami, Tadahiro (1 March 2005). "Chiang Mai Initiative as the Foundation of Financial Stability in East Asia" (PDF). Institute for International Monetary Affairs. Archived from the original (PDF) on 16 March 2012. Retrieved 4 January 2010.
- Henning, C. Randall (2002). East Asian Financial Cooperation. Washington, D.C.: ISBN 978-0-88132-338-2. Archived from the original(PDF) on 21 December 2009. Retrieved 2 January 2010.
- Park, Yung Chul; Wang, Yunjong (14 January 2005). "The Chiang Mai Initiative and Beyond". The World Economy. 28 (1): 91–101. S2CID 153673288.
- Rana, Pradumna B. (February 2002). "Monetary and Financial Cooperation in East Asia: The Chiang Mai Initiative and Beyond" (PDF). Economics Research Department Working Paper Series. ISSN 1655-5252. Archived from the original (PDF) on 6 December 2010. Retrieved 23 January 2010.)
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