The finance ministers and the central bank governors of ASEAN member countries, South Korea, Japan and China decided to discuss the utilization of the yuan and the yen in the framework of the Chiang Mai Initiative Multilateralization (CMIM).
The CMIM is a multilateral currency swap with a total size of US$240 billion and its purpose is to provide U.S. dollar-based support in the event of a liquidity crisis in any one of the countries.
In a statement relesed on May 2, they said that they recently agreed on new general guidelines with regard to the utilization of the currencies in the CMIM. “The demand for use of local currencies rises due to mounting uncertainties and adverse external conditions and during local cross-border transactions,” they said, adding, “The use of the local currencies can be an option for beefing up the CMIM.”
They went on to say that the member countries of the ASEAN+3 have yet to agree on the necessity of the local currencies in liquidity support and the degree of use of the local currencies in cross-border transactions. “The former matter should be based on demand and should be designed and implemented based on the willingness of both assistance requesting and providing parties,” they mentioned.