Tokyo, Asian nations in currency swap talks


Japan and Southeast Asian countries are in talks over expanding currency swap arrangements to help cushion their economies in financial emergencies, an official said Thursday ahead of a Japan-ASEAN summit next week.

A swap is a device useful when normal foreign exchange markets seize up, in which financial authorities agree to buy local currency with something much more liquid — usually the dollar.

Tokyo is now talking with Indonesia, the Philippines, Malaysia, Thailand, and Singapore to expand or resume bilateral currency swaps, a Finance Ministry official said.

Since the onset of the Asian currency crisis in the late 1990s, Japan has spearheaded efforts to build a multilateral currency swap agreement, now known as the Chiang Mai Initiative.

“We are discussing with a view that bilateral arrangements are faster in terms of decision-making than the multilateral framework,” the official said.