FX.co ★ ASEAN+3 to Expand Chiang Mai Initiative

Japan, China, South Korea, and the ASEAN nations are poised to broaden their emergency currency swap arrangement, the Chiang Mai Initiative, to address crises beyond mere financial shocks, such as infectious disease outbreaks and natural disasters, as reported by Nikkei Asia. This initiative, originally formulated following the 1997–98 Asian financial crisis, permits member countries to access foreign currencies to stabilize their economies. The decision to expand the initiative draws from experiences during the COVID-19 pandemic, when some members encountered shortages of foreign currency. Representatives are expected to finalize the agreement on this extension during their meeting in Milan this Sunday, with anticipated implementation by May. The Chiang Mai Initiative currently commands a reserve of $240 billion in foreign exchange, with contributions of $76.8 billion from both Japan and China, $38.4 billion from South Korea, and a collective sum of $48 billion from ASEAN members.