Deputy Prime Minister Choi presides over the meeting of ASEAN + 3 finance ministers and central bank governors
Establishing a new fast funding program… Short-term, small-scale funding becomes possible
Sharing the benefits of the financial structure and paid-in capital approach… 2025 model confirmed
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Choi Sang-mok (right), the Deputy Prime Minister and Minister of Strategy and Finance, gives a greeting at the Joint Press Conference of the ASEAN+3 Finance Ministers Meeting held at the Pullman Hotel in Tbilisi, Josiah, on the 3rd ( local time). Bank of Korea Governor Lee Chang-yong listens to Deputy Prime Minister Choi’s remarks. Photo = Ministry of Strategy and Finance
At the 27th Meeting of ASEAN + 3 Finance Ministers and Central Bank Governors, member countries finally approved the introduction of a new loan program to increase the effectiveness of the Chiang Mai Multilateralization Initiative (CMIM), a regional financial safety net. The benefits of restructuring the financial structure to paid-in capital were also agreed.
Deputy Prime Minister Choi Sang-mok presided over the ASEAN+3 Finance Ministers and Central Bank Governors Meeting held in Tbilisi, Georgia on the 3rd (local time) as a co-chair country with Laos and discussed strengthening CMIM to resolve economic uncertainty in the region. Member countries approved the creation of a new ‘Rapid Financing Program (RFF)’ which can provide funding in the event of a sudden external shock such as a pandemic or natural disaster. Accordingly, it has become possible to provide small-scale and short-term financing without pre- and post-conditions to resolve emergencies caused by temporary external shocks such as natural disasters. It was agreed to expand the currency used in the fast-track funding program to ‘eligible freely convertible currency (FUC)’. It was agreed to complete the review of the agreement within this year and to officially launch the rapid funding program at next year’s ministerial meeting. At present, only the US dollar can be freely issued under the CMIM system, but with this revision, the yen and the yuan are also recognized as convertible currencies. give
Meanwhile, all member countries agreed on the benefits of changing the financial structure to a paid-up capital approach to increase the effectiveness of CMIM, the current multilateral currency exchange. In order to do this firmly, it was agreed to analyze the advantages and disadvantages of various models and decide on a specific model by 2025. Currently, the models of the structure of large paid-up capital financial resources include the European Stability Mechanism (ESM), a global bailout fund -wide for the IMF and the Eurozone, and the Renminbi Liquidity Agreement (RMBLA) concluded between the People’s Bank of China and the Bank for International Settlements (BIS).
Deputy Prime Minister Choi said, “CMIM is the starting point of ASEAN + 3 cooperation to respond to the financial crisis in the region, and at the same time, the most important result of cooperation.” He added, “Many important decisions are necessary to strengthen CMIM in this ministerial meeting.” He emphasized, “We hope that the following procedures will be completed quickly in the future and serve as the necessary primer not only for an effective response to a crisis but also for a quick economic recovery after the crisis. “
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ASEAN+3 economy showing good growth rate… Inflation is expected to continue to ease
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Deputy Prime Minister Choi Sang-mok (second from left) and Minister of Strategy and Finance answer questions from reporters at the ASEAN+3 Finance Ministers Meeting Joint Press Conference held at the Pullman Hotel in Tbilisi, Josiah , on the 3rd. (local time). From left, Bank of Korea Governor Lee Chang-yong, Deputy Prime Minister Choi, Laos Finance Minister Santihap Pombihan, and Laos Central Bank Governor Bonrua Shinsaiborabong. Photo = Ministry of Strategy and Finance
In this meeting, member countries predicted that the ASEAN + 3 economies would achieve a good growth rate and that prices would continue to ease thanks to export recovery and a robust domestic market due to the recovery of the semiconductor economy. However, it was agreed that rising prices of raw materials, heightened geopolitical tensions, as well as the recent increase in volatility in the foreign exchange market are risk factors.
Member States recognized that the current positive outlook could be an opportunity to restore policy capacity for the future, and agreed on the need to ensure fiscal sustainability, maintain a tight monetary policy, and improve growth potential. We also reaffirmed our commitment to a multilateral trading system based on open, free and fair rules.
Deputy Prime Minister Choi said, “The rapid recovery of the regional economy and member countries’ efforts to normalize economic policies after the pandemic are encouraging.” However, he diagnosed, “Given the nature of the regional economy with a relatively high external dependency, it is necessary to keep a close eye on risk factors such as the recent increase in financial market volatility such as exchange rates as well as geopolitical progress. conflict.” He added, “If member countries jointly monitor risk factors and share information and experiences on economic and financial policies, we will prevent risks in advance and increase resilience after the crisis.”
Finally, member countries asked AMRO not only to monitor macroeconomic trends in the region but also to analyze new risks and challenging factors in a timely manner. In addition, they support efforts to develop the regional bond market and discover new financial cooperation agendas, with continued progress expected in the future.
Meanwhile, next year’s 29th Meeting of ASEAN + 3 Finance Ministers and Central Bank Governors is to be held in Milan, Italy, chaired by China and Malaysia.
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