MACTAN ISLAND-- Monetary authorities of the 10-member ASEAN bloc still in talks for a hike in the dissociate portion of the USD 240-billion Chiang Mai Initiative Multilateralization (CMIM)facility.
Since the increase in the delinked portion of CMIM in 2014, ASEAN economic and finance authorities have failed to come up with a figure amid volatilities caused by development in advanced economies.
It's still under discussion. Maybe the next possible target is the vicinity of 40 percent but that's under discussion, Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. told PNA in an interview at the sidelines of the 3rd ASEAN Finance Ministers' and Central Bank Governors' joint meeting and related meetings being held here from April 3-7, 2017.
To date, ASEAN+3 members can access up to 30 percent of their maximum borrowing amount from the facility without the need for any International Monetary Fund (IMF) lending conditions.
Talks about the possible increase in the IMF delinked portion started in 2012 and so far it has been raised by 10 percent in 2014.
Initially, the CMIM is only for the 10-country members of the Association of Southeast Asian Nations (ASEAN) composed of Brunei Darussalam, Cambodia, Indonesia, Lao People's Democratic Republic, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. China, Japan, and Korea joined in later.
The multilateral swap facility was established to help ASEAN members that are facing liquidity crisis or issues in their balance of payment (BOP) position.
Tetangco explained that further increase in the IMF delinked portion does not diminish the very design of the CMIM to be a supplementary facility to the IMF.
The delinking can also be a sign of confidence among the members on the CMIM as well as the increase capacity of AMRO (ASEAN+3 Macroeconomic Research Office) to support the operationalization of this regional safety net, he said.
In 2014, the CMIM fund was raised from USD120 billion to USD240 billion.
Tetangco said this decision was a big milestone in the region.
It re-affirmed the strong commitment of the ASEAN+3 members towards greater financial stability (and) regional financial stability, he said.
Tetangco said the facility was specifically established to address liquidity crisis among the ASEAN+3 members and not to aid in other needs such as funding augmentation for infrastructure development, which the region needs.
He, however, did not see any of the ASEAN+3 members tapping the facility in the near term.
While there have been volatilities we do not really see any brewing crisis in the horizon to justify activation of the Chiang Mai at this time, he added.
Source: Philippines News Agency