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Agreement to expand regional currency swap in East Asia takes effect

July 16, 2014

An agreement among 13 East Asian countries to bolster regional currency swap cooperation took effect Thursday, Japan'sFinance Ministry said.

The aim of the amended "Chiang Mai Initiative Multilateralization" scheme is to double the size of the currency swap to $240 billion to cope with a potential financial crisis that may hit the region.

"This amendment will strengthen the regional safety net for the CMIM participants in responding to potential or actual balance-of-payments and short-term liquidity difficulties," the ministry said.

In 2012, Japan, China, South Korea and the 10 Association of Southeast Asian Nations reached the agreement. The multilateral currency swap agreement was launched in 2010.

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Source: Japan Economic Newswire

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