Within the framework of the ASEAN+3 regional banking and financial cooperation process, the revised Agreement on Chiang Mai Initiative Multilateralization (CMIM) official came into effect on June 23, 2020. The Agreement was signed by the Finance Ministers and the Central Bank Governors of the ASEAN Member States, China, Japan, Korea (ASEAN+3), and the Monetary Authority of Hong Kong, China.
The CMIM Agreement is a mode of supporting the liquidity in USD of the ASEAN+3 region with the committed scale of up to USD 240 billion made through currency swaps between the Central Banks, so that the CMIM members can resolve their urgent difficulties related to the balance of payment and the USD liquidity in the short term, to achieve monetary and macroeconomic stability.
The revised CMIM Agreement is to consolidate and improve the legal documents and related dossiers during the operation and implementation of the CMIM Agreement. The revisions to the Agreement mainly focus on technical issues, including: Finalizing the regulations on the procedures and mechanisms for making lending decisions; Strengthening the coordination with the International Monetary Fund (IMF) within the framework of the IMF’s co-financing loans; Updating the technical aspects to accommodate new developments.
The effectiveness and implementation of the revised CMIM Agreement shows the readiness and effectiveness of the CMIM mechanism, heading towards stabilizing the regional financial and monetary markets. In addition, it is also a symbol of the enduring cooperation between the Central Banks and the Finance Ministries of the ASEAN+3 countries in the operation and maintenance of the regional financial safety network.
VA