ASTANA, KAZAKHSTAN – Top financial officials from East Asian countries agreed on Saturday to strengthen a multilateral currency swap scheme as a “part of the regional financial safety net.”

Finance ministers and central bank governors from the 10-member Association of Southeast Asian Nations plus South Korea, Japan, and China exchanged views on recent global and regional economic developments on the sidelines of the Asian Development Bank’s annual meeting in Astana, Kazakhstan.

To develop resilient and safe bond markets in the region, the leaders agreed to continue develop the $240 billion Chiang Mai Initiative Multilateralisation scheme.

The standby fund, set up as a swap arrangement after the 1997 Asian financial crisis, is meant to help any member-country solve or prevent any recurrence of an Asian currency crisis.

“We reaffirm our commitment to further strengthen the CMIM as part of the regional financial safety net,” officials said in a statement released after the meeting.

The statement came amid growing concerns over challenges that include market jitters about the Federal Reserve‘s bond-buying slowdown, global tensions over Ukraine and signs of a slowdown in China’s economic growth.

The leaders said in the communique they welcome the signs of global economic recovery in the first quarter of the year, supported by the steady growth in advanced economies. They, however, remain “vigilant” due to potential global risks and vulnerabilities.

The officials also agreed to further strengthen ASEAN+3 Macroeconomic Research Office, or AMRO, which they set up in 2011 to provide economic and financial surveillance and help the countries run the Chiang Mai scheme.

They also agreed to endorse a set of guidelines for the further cooperation with the International Monetary Fund to “help enhance CMIM’s effectiveness and AMRO‘s capacity,” according to the statement.

Meanwhile, Korea, Japan and China failed to hold a trilateral meeting of their financial chiefs for the second consecutive year due to the absence Korea’s Deputy Prime Minister and Finance Minister Hyun Oh-seok.

“We understand that because of ferry disaster emergency response has to be made,” Taro Aso, Japan’s finance minister and deputy prime minister, who co-chaired the ASEAN-plus-three meeting with Myanmar, said at a news conference after the meeting.

While not commenting on whether the significance of this year‘s meeting was diminished by the absence of Hyun, he said he is always open to have a separate meeting with the Korean and Chinese counter parts.

“The economy is living animal, if something urgency happens (in the region) I’m willing to meet the Korean finance minister or Chinese minister,” he added. 

By Oh Kyu-wook (596story@heraldcorp.com)