Korea, Japan, China, Asean discuss currency swap, finance cooperation

Attendees of the Asean Plus Three Finance and Central Bank Deputies' Meeting pose for a photo during their two-day meeting in Kanazawa, Japan, from Wednesday to Thursday. [MINISTRY OF ECONOMY AND FINANCE]

Vice finance ministers from Korea, China, Japan, and the Association of Southeast Asian Nations (Asean) agreed to enhance a currency swap mechanism as part of broader efforts to strengthen financial cooperation.

The consensus was reached during the two-day regular meeting of the vice ministers, as well as senior representatives from their central banks, held in Kanazawa, Japan, started on Wednesday.

The officials decided to push for launching the Rapid Financing Facility (RFF) under their Chiang Mai Initiative Multilateralization (CMIM) agreement, which provides prompt financial assistance to its members facing urgent payment needs, according to the Ministry of Economy and Finance on Friday.

The envisioned RFF is expected to be approved during a ministerial meeting next year, the ministry said.

Launched in 2010, the CMIM is a multilateral currency swap arrangement among the Asean Plus Three nations, which aims to give liquidity to member nations in times of financial crisis. The pool amounts to $240 billion, with South Korea contributing $38.4 billion.

"It is crucial to make the regional financial safety net helpful in real terms for member nations. South Korea, as a co-chairman for next year, will actively lead discussions for reform measures," Deputy Finance Minister Choi Ji-young said.

The next round of the Asean Plus Three Finance Ministers' and Central Bank Governors' Meeting is scheduled to take place in Tbilisi, Georgia, in May 2024.

BY SEO JI-EUN,YONHAP [seo.jieun1@joongang.co.kr]