Currency Swaps Seen Evolving into Asian Monetary Fund
YANGON, Myanmar (AP) ? A series of currency swap agreements that Asian nations signed over the past year could eventually become a formal Asian Monetary Fund, officials said Friday.
The idea of an Asian Monetary Fund, first proposed by Japan and vehemently opposed by the United States, "is still being considered," said Rodolfo Severino, the secretary-general of the Association of Southeast Asian Nations.
"It has been delayed. Short of that, we are embarking on a network of bilateral swap agreements," he told reporters during a two-day conference of finance ministers of ASEAN countries.
After the outbreak of Asia's 1997 financial crisis, Japan proposed creating an Asia-only fund to support regional currencies should a similar crisis ever recur.
But the idea was shot down by the United States, which insisted the International Monetary Fund should remain the lender of last resort in the event of financial shocks.
Bilateral swap agreements were proposed at a May 2000 meeting of the 10 ASEAN members and Japan, China and Korea, and so far six have been signed involving a total of dlrs 14 billion.
Japan has signed bilateral deals with Korea, China, Thailand, Philippines and Malaysia, while China has one with Thailand. More swap agreements are still being negotiated.
The deals allow central banks to borrow foreign currency in the short term, repaying it with their domestic currency at a later date. …