A regional fund comprised of investment from 10 ASEAN member nations together with Korea, China and Japan was launched this Tuesday.
The US$120 billion fund known as the Chiang Mai Initiative Multilateralization Agreement has come into effect to act as a safety net for member countries in the case of an urgent need of liquidity.
Park Young-joon, department head of the Korea Institute for International Economic Policy, said, "One big significance of the fund's launch is that this region now has its own financial safety net which can perhaps one day grow to become an Asian Monetary Fund."
In a joint statement the member states said the successful launch of the fund demonstrates their solid commitments and concerted efforts to further enhance regional capacity to safeguard against downside risks and challenges in the global economy.
The fund seeks to address the balance of payment and short-term liquidity problems in the region by providing financial support through currency swap transactions among members in times of a money supply shortage.
Going forward, the ASEAN plus three members are working towards increasing the total size of the fund, establishing an independent regional surveillance unit and opening a CMI office.