ASEAN+3 move step closer to FX swap plan: IMF<\/p>\n
TOKYO (Reuters): Asian nations took a step towards realizing
\nan ambitious currency swap plan at the weekend by agreeing to
\ninvolve the International Monetary Fund in the scheme, a senior
\nIMF official said on Monday.<\/p>\n
Kunio Saito, the IMF director for Asia and the Pacific, told
\nReuters in an interview on Monday that the consensus reached by
\nthe 10-member Association of Southeast Asian Nations (ASEAN)
\nshould promote talks on finalizing bilateral swap agreements
\n(BSA) -- seen as an important first stage for the scheme.<\/p>\n
\"In my personal opinion, the (ASEAN) statement took care of
\nsome dissatisfaction felt among Asian nations over the scheme. I
\nthink it will make it easier for them to promote negotiations on
\nbilateral swap agreements,\" Saito said.<\/p>\n
The plan aims to reduce volatility in currency markets by
\nlinking ASEAN nations' foreign reserves with the three other
\nregional economic powerhouses -- China, Japan and South Korea.<\/p>\n
Over the weekend, ASEAN finance ministers agreed that the
\nplanned scheme would aim to complement and supplement IMF lending
\nfacilities. The plan has been bogged down by differences over its
\nimplementation and the question of the IMF's role.<\/p>\n
Malaysia, which hosted the weekend ASEAN meeting, has been
\nespecially unhappy at proposals to tie disbursements under the
\nswaps scheme to IMF-monitored reforms.<\/p>\n
Saito said the IMF would support Asia's recent efforts to
\npromote regional cooperation with the currency swap plan, adding
\nthat the fund also wanted Asian nations to cooperate with the
\nWashington-based institution on the matter.<\/p>\n
\"Swap arrangements would be related to the job of the IMF and
\nwe want Asian nations to set up the arrangements while
\ncooperating with the IMF.\"<\/p>\n
While ASEAN finance ministers said that there was consensus
\nthat the bilateral swap agreements would complement and
\nsupplement IMF facilities, their weekend statement left it up to
\nindividual countries to work out the details.<\/p>\n
\"To be beneficial to the individual ASEAN countries, the terms
\nand modalities of the BSA should take into account the different
\neconomic fundamentals, specific circumstances and financing needs
\nof individual countries,\" the statement said.<\/p>\n
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
\nMyanmar, the Philippines, Singapore, Thailand and Vietnam.<\/p>\n
While the ASEAN countries favored a loose case-by-case
\napproach to agreeing disbursement, the likely lender nations from
\nnortheast Asia were less flexible.<\/p>\n
Japan, the driving force behind the plan, has stressed that
\nthe linkage to the IMF was necessary for the scheme and hopes to
\nsign as many bilateral agreements as possible before the ASEAN+3
\ngroup meets on the sidelines of the Asian Development Bank's
\nannual meeting in Honolulu next month.<\/p>\n
Japanese officials have said Japan has made most progress with
\nThailand so far, adding that they hope to announce the signing
\nbefore the Honolulu meeting, probably later this month.<\/p>\n
Japan's top financial diplomat, Haruhiko Kuroda, last week met
\nThai Finance Minister Somkid Jatusripitak in Bangkok to put the
\nfinal touches to a bilateral currency swap deal.<\/p>\n
Saito joined a growing list of senior IMF officials warning
\nthe fund would downgrade its growth forecast in its next World
\nEconomic Outlook due out later this month.<\/p>\n
Saito said he expected growth in Southeast Asian economies to
\nvary between 3.0-6.0 percent this year, compared with a previous
\nforecast of above six percent.<\/p>\n
But he added that their growth would pick up in the second
\nhalf of this year because the current inventory adjustment for
\ninformation technology-related products would end and the
\nbenefits of a recent series of credit easings in Japan and the
\nUnited States would appear later this year.<\/p>\n
But although the IMF will downgrade its global economic
\nforecasts, \"that does not mean there is a global recession and
\nnobody now thinks there will be another Asian crisis,\" he said.<\/p>",
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