A US$120 billion currency swap arrangement between all 10 ASEAN countries, China, Japan and South Korea went into effect Wednesday, aimed at providing liquidity in times of crisis.
The Chiang Mai Initiative Multilateralisation (CMIM) agreement aims to address balance of payment and short-term liquidity difficulties in the region, and to supplement the existing international financial arrangements, according to a joint statement Wednesday from the Asian neighbours.
The CMIM, which stems from a December 2009 agreement, will provide financial support through currency-swap transactions among its participants in times of liquidity need, according to the statement.
“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,” the statement said.
Each country can swap its local currency for US dollars in an amount previously contributed, times a purchasing multiplier, it added.
Cambodia can access up to $600 million in currency, according to the structure of the agreement.
Tal Nay Im, director general of the National Bank, said Wednesday that Cambodia had joined the fund to access liquidity in times of future crisis.
“For Cambodia, at the moment, we do not need any liquidity,” she said.
China, Japan and South Korea together contributed 80 percent of the fund, or $96 billion.
Indonesia, Thailand, Malaysia and Singapore contributed $4.77 billion each, and the Philippines contributed another $3.68 billion. Vietnam gave $1 billion, Cambodia $120 million and Myanmar $60 million, followed by Brunei and Laos at $30 million each.