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At least Kasama sa stability ng RP Peso nito

Discussion in 'Band of Glockers' started by chowchow, May 5, 2008.

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    Jan 15, 2007
    Asian Ministers Agree to Pool $80 Billion of Reserves
    By Keiko Ujikane and Seyoon Kim
    May 4 (Bloomberg) -- Finance ministers from 13 Asian nations agreed to create a pool at least $80 billion in foreign- exchange reserves to be tapped by nations in case they need to protect currencies.

    Contributions from Japan, China and South Korea will total 80 percent of the pool, while the 10-member Association of Southeast Asian Nations will make up the rest, the ministers said in a statement after talks in Madrid, where the Asian Development Bank is holding its annual meeting.

    Asian governments are trying to avoid relying on institutions like the International Monetary Fund, which forced them to adopt harsh economic policies in return for bailouts during the financial crisis a decade ago. Pooling of foreign reserves may help prevent a repeat of the region's turmoil.

    All 13 nations will contribute to the fund, and they will still manage their own reserves under the arrangement. Exact contributions have yet to be decided. Today's talks involved Japanese Finance Minister Fukushiro Nukaga, China's Xie Xuren, South Korea's Kang Man Soo and their counterparts from Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

    Ministers last year agreed to set aside part of their $3.4 trillion of foreign reserves for emergencies, without deciding the size of the pool and when they would start the fund. The nations decided to accelerate discussions on the details of borrowing conditions, the statement said.

    `Appropriate Actions'

    On the economy, Asian governments ``confirmed the importance of taking appropriate actions'' to sustain economic activity, the statement said.

    ``The regional economy has continued its strong growth and is forecast to remain robust although somewhat weaker,'' the statement said. ``Nonetheless, several risks remain such as further worsening of the growth prospects, vulnerability of financial markets, and continued inflationary pressures from rising oil and non-oil commodity prices.''

    Crude oil has soared, and rice prices have more than doubled since Asian finance ministers met a year ago in Kyoto, Japan. The increases have stoked social tensions and led to wider fiscal deficits as governments subsidize food and energy costs for their people.

    The reserve pool is an expansion of a current arrangement that only allows for bilateral currency swaps. It is designed to ensure central banks have enough to shield their currencies from speculative attacks like those that depleted the reserves of some countries during the Asian financial crisis in 1997 and 1998.

    During that crisis, Indonesia, Thailand and South Korea spent most of their foreign reserves to prop up their currencies. The three nations had to turn to the IMF for more than $100 billion of loans to shore up their finances when investors sold their currencies. The IMF forced governments to cut spending, raise interest rates and sell state-owned companies.

    To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.netSeyoon Kim in Madrid at

    Last Updated: May 4, 2008 13:09 EDT

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