ASEAN+3 currency swap contract comes into effect

The CMIM is a multilateral currency swap contract which is developed from the current CMI bilateral swap network to facilitate prompt and simultaneous currency swap transactions through establishing a common decision making mechanism under a single contract.

The US $120-billion contract aims at (i) addressing balance of payment and short-term liquidity difficulties in the region, and (ii) supplementing the existing international financial arrangements.

The CMIM will provide financial support through currency swap transactions among CMIM participants in times of liquidity need. Each CMIM participant is entitled, in accordance with the procedures and conditions set out in the Agreement, to swap its local currency with the US Dollars for an amount up to its contribution multiplied by its purchasing multiplier.

The successful launch of the CMIM, together with an independent regional surveillance unit to be established, demonstrates the solid commitments and concerted efforts of ASEAN 3 members to further enhance regional capacity to safeguard against downside risks and challenges in the global economy.

Việt Nam signed the agreement on December 24, 2009. The country contributed US $1 billion to the fund which can help it respond to difficulties in foreign currency liquidity and consolidate safety of the financial system against external negative changes.

By Xuân Hồng