Indonesia, Japan commerce talks on currency swap pact

Indonesia, Japan commerce talks on currency swap pact

Dow Jones, Tokyo

Indonesia and Japan have kicked off negotiations to conclude a
bilateral currency swap agreement as part of an initiative among
Asian nations to promote financial stability in the region, an
international financial source said Tuesday, Kyodo News reported.

Officials from the two countries held the first round of
negotiations in Jakarta on Wednesday and Thursday last week in
the hope of wrapping up the talks at an early date, the source
said, according to Kyodo.

Tokyo and Jakarta began the negotiations under the so-called
Chiang Mai Initiative intended to create a network of bilateral
currency swap accords among the 10-member Association of
Southeast Asian Nations plus Japan, China and South Korea.

The planned network is aimed at bolstering the East Asian
nations' defenses against the kind of speculative attacks that
led to the Asian financial crisis of 1997 and 1998.

Acceleration of efforts to complete the network will be a
prominent topic for discussion at a meeting in Shanghai on Friday
of the "ASEAN Plus Three" finance ministers.

Japan has already signed swap arrangements with South Korea,
Thailand, the Philippines, Malaysia and China. It has also been
in talks with Singapore since early March.

Although they are close to striking a deal, Beijing and Seoul
will not be able to announce their accord in Shanghai, also the
venue for the annual meeting of the Asian Development Bank to be
held from Friday through Sunday, the source said.

In addition to a pact with Japan, China has another swap
agreement with Thailand. South Korea has been holding
negotiations with Malaysia, the Philippines and Thailand.

Finance ministers from ASEAN, Japan and South Korea have been
meeting since 1999. ASEAN comprises Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and
Vietnam, Kyodo reported.