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MANILA – Finance ministers and central bank governors of ASEAN + 3 approved increasing the unlinked portion of the Chiang Mai Initiative Multilateralization (CMIM) from $ 240 billion after seven years from 30% to 40% .
In a joint statement to the 23rd Asean + 3 Meeting of Finance Ministers and Central Bank Governors issued on Friday, the group called a “historic achievement” the continuous improvement of the multilateral regional exchange mechanism “as a reliable self-help mechanism in Asean + 3 region. “
To make the operational preparation of the swap agreement more operational, the finance ministers and central bank governors also decided to “institutionalize voluntary and demand-based contributions, both for requesting parties and suppliers, in the CMIM”, and “clarify the CMIM conditionality framework for the unrelated part of the IMF to allow smooth implementation of the CMIM Agreement.”
CMIM was established in 2009 to assist members of the Association of Southeast Asian Nations (Asean) facing liquidity crises or problems in their balance of payments (BOP) position.
It has a part that is unrelated to the credit conditions of the International Monetary Fund (IMF).
The increase in the untied portion means that ASEAN + 3 members can now access up to 40 percent of their maximum service loan amount without the need for any IMF conditionality.
The facility was initially available to ASEAN member countries, namely Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. However, it was also made available to China, Japan, and South Korea when they joined the group.
The statement said that the pandemic caused by the coronavirus disease (Covid-19) has greatly affected both human lives and economies globally.
“With the global economy increasingly interconnected, disruptions to global supply chains and the challenges faced by many industries as a result of the pandemic have demonstrated the importance of ensuring the resilience of our economies to shocks,” he said.
Therefore, the authorities “act swiftly to mitigate the impact of the pandemic through the deployment of extraordinary measures in the form of fiscal, monetary and credit support directed at households and companies, and granted regulatory tolerance, as well as liquidity support, to the Finance system”.
He said that while signs of recovery continue to show risks, risks remain “given the uncertain trajectory of the Covid-19 pandemic.”
He said Asean + 3 officials “are taking steps to reduce vulnerabilities to these risks and are determined to continue to use all available policy tools to support the sustained recovery of our economies.”
“We will carefully measure the appropriate time to exit these pandemic measures according to the economic and pandemic situation of each member, to avoid a cliff effect and safeguard growth and financial stability in the Asean + 3 region. We will remain steadfast in our commitment to maintain an open and rules-based multilateral trade and investment system, and to strengthen regional integration and cooperation, ”he added. (PNA)
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