East Asian Nations Expand Currency Pool
Officials from East Asia’s largest economies have agreed to enlarge a currency swap agreement to boost the size of a common pool of regional reserves to $120 billion from $80 billion to protect weakening currencies. The 10 members of the Association of Southeast Asian Nations, or Asean, plus representatives of China, Japan and South Korea, said Sunday they plan to ease access to the pool under the so-called Chiang Mai Initiative.
The initiative was an agreement that came in the wake of the 1997 Asian financial crisis to address foreign reserve deficits through bilateral currency swaps. More funds from the initiative, including bilateral swap agreements across the region, may be accessible, regardless of agreements with the International Monetary Fund, the officials said.
Currently, only around 20% of the pool is accessible by countries not involved in a program with the IMF, a condition that has complicated access to funding. Asean members will provide 20% of funding, with the balance coming from China, Japan and South Korea. The plan is expected to be approved later this year.
At the same time, the grouping said it intends to create an independent regional surveillance unit to promote economic monitoring and facilitate the development of the initiative, in conjunction with the IMF.
Separately, Japan promised to provide Indonesia with new financial support that includes giving the country financial guarantees worth up to $1.5 billion in issuing yen-denominated samurai bonds.
The new steps also include doubling the scale of the bilateral swap arrangement between the two countries to $12 billion from $6 billion. A senior Japanese government official said that the moves are aimed at helping Jakarta finance various economic projects and maintain its economic fundamentals.
The new financial aid was announced following a meeting between Japan’s Parliamentary Secretary for Finance, Shinsuke Suematsu, and Indonesian Finance Minister Sri Mulyani Indrawati Saturday on the sidelines of the meeting of finance chiefs of Asean plus three countries. The Japanese official emphasized that these steps don’t mean that Indonesia is in financially tight conditions.
Rupee falls below 50 a dollar as gold prices zoom news
The rupee fell to a two-month low at 50.01/02 down 33 paise from its previous close of 49.67/68 to a dollar as commercial banks bought dollar to arbitrage in offshore non-deliverable forwards. The US currency also gained from rising gold prices, which pushed domestic prices of the yellow metal above Rs15,500 per 10 gm in the early trade on the bullion market.
Gold surged to a new peak at Rs15,650 per 10 gm in opening trade in the national capital on brisk buying. Triggered by safe-haven buying amidst a global economic downturn, gold prices in the overseas market also rose to their highest level in seven months, near $970 an ounce.
The rupee came off intraday lows in afternoon trade after some state-run banks sold dollars to prevent the Indian unit from dropping below 50-per-dollar mark. A recovery in the local stock market also helped.
State-run banks were seen selling dollars around Rs49.85 per dollar, possibly on behalf of the Reserve Bank of India, to protect the domestic unit from falling further.
Share prices pared losses to 0.3 per cent after falling as much as 1.2 per cent earlier.
-
Recent Posts
- Stock Trading Software > Using Day Trading Software or a Stock Market System
- Choosing a Forex Broker That Wont Rip You Off
- Fisher Investments Releases Latest Stock Market Outlook
- U.s. Automaker Ceos: Congress Should Address Skewed Japanese Yen
- Peace Dollar
- Better Trades – a Better Teaching Strategy
- How to Find An Investor For Your Business
- What is Foreign Currency Trading?
Meta
Now You Can Also Earn Good Money from Forex Trading House
Register your free account and write post in web site and earn good amount on every each post.
No Copyright Allowed
Tags
