More of the same: Swap agreements are a workable short-term solution for the poorest countries, as they boost tappable reserves. But Asia still has to tackle the larger issue of why the world’s biggest surplus countries cannot hold on to their own savings - most investment goes abroad (Lex)
Asian central banks have been injecting liquidity into banking system and cutting rates (discount/policy rate) and/or bank reserve requirements to ease liquidity squeeze and spike in short-term rates (swap, overnight, inter-bank rates and spreads) Some banned short- selling, narrowed trading bands in stock market, guaranteed deposits, provided fiscal stimulus packages, introduced stabilization funds to contain market volatility, intervened to contain currency depreciation due to capital outflows, declining external balances Outlook Indonesia, and perhaps Philippines, might also seek the IMF's new short-term liquidity facility as an endorsement of its sound macro policies (Citi) In spite of limited exposure to US bank losses, risks from external funding crunch, higher borrowing costs, bank panics and deposit withdrawals are growing for banks and corporates in S.Korea, Hong Kong, Taiwan On Dec 15, 8:41 am, Justice <[email protected]> wrote: > RGE reports it slightly differently: > > Dec 12: South Korea and Japan have agreed to increase an existing > unconditional KRW-JPY swap arrangement to $20bn from $3b effective > until April 2009. This supplements a $10b agreement that can be used > in times of crisis. China and South Korea agreed to a new bilateral > KRW-CNY swap agreement worth $28b for three years. The swap > agreements give South Korea access to an additional $35bn equivalent > of foreign currencies (adding to the $30bn swap agreements made by the > Fed to Korea and Singapore each on Oct 29) a major source of strength > for KRW. They reflect closer co-ordination of economic and exchange > rate policies within Asia particularly as Japan and China want to > increasingly anchoring other weaker Asian currencies to JPY and CNY. > (Danske) > > ========= > here it looks as if two separate agreements are in place. Not > terribly important, but for people who see menace everywhere, this > report is "less" frightening than the three-party arrangement. > > On Dec 13, 6:35 am, "[email protected]" <[email protected]> wrote: > > > > >http://news.xinhuanet.com/english/2008-12/13/content_10499397.htm > > > FUKUOKA, Japan, Dec. 13 (Xinhua) -- Leaders of China, Japan and South > > Korea Saturday signed a Joint Statement for Tripartite Partnership > > after a tripartite meeting. > > > In the statement, Chinese Premier Wen Jiabao, Japanese Prime > > Minister Taro Aso and South Korean President Lee Myung-bak said they > > gathered here to help lay a solid foundation in promoting their > > tripartite cooperation. > > > The tripartite cooperation will not only contribute to create a > > peaceful, prosperous and sustainable future for the region and > > international community, but also be crucial to address the serious > > challenges in the global economy and the financial markets, said the > > statement. > > > Content with the achievements made so far in the tripartite > > cooperation in enhancing mutual political trust, increasing trade and > > economic contacts, expanding social and cultural exchange and > > strengthening financial cooperation, the three leaders have committed > > themselves to further promote the trilateral cooperation, according to > > the statement. > > > "We have reached common recognition that the tripartite > > cooperation will be guided under the principle of openness, > > transparency, mutual trust, common interest and respect for our > > diverse cultures, and that it will contribute to advancing wider > > regional cooperation frameworks such as ASEAN+3, EAS, ARF and APEC in > > a complementary and mutually reinforcing manner." > > > The statement also said the tripartite meeting in Fukuoka will > > pave the way for a new era of tripartite partnership which will lead > > to the peace and sustainable development in the region. > > > Recognizing the importance of this first-ever Trilateral Summit > > Meeting held independently of other occasions, the leaders decided to > > hold the Summit in the three countries on a regular basis, with the > > next such meeting to be held in China next year, the statement added. > > >http://news.xinhuanet.com/english/2008-12/13/content_10499717.htm > > > FUKUOKA, Japan, Dec. 13 (Xinhua) -- Leaders of China, Japan and South > > Korea agreed Saturday to enhance effective cooperation in dealing with > > challenges amid the raging global financial crisis. > > > It is important to enhance regional cooperation to tackle the > > ongoing financial turmoil, said the Joint Statement on the > > International Finance and Economy issued after a meeting of Chinese > > Premier Wen Jiabao, Japanese Prime Minister Taro Aso and South Korean > > President Lee Myung-bak. > > > Welcome the results of the Trilateral Finance Ministers' Meeting > > among China, Japan and South Korea on Nov. 14 in Washington and the > > recent decisions on the increase in the size of the bilateral swap > > arrangements among the three countries, the leaders also welcomed the > > setting up of the Tripartite Governors' Meeting of the three central > > banks to be held on a regular basis. > > > The three leaders reiterated their commitment to working with > > ASEAN members to expedite the process of the Chiang Mai Intitiative > > Multilateralization and strengthen regional surveillance mechanism for > > effective monitoring on the regional economy and financial markets, > > the statement said. > > > Efforts are needed to minimize the negative impacts of the > > financial crisis on the global economy, to facilitate regional trade > > and investment and promote regional cooperation, according to the > > statement. > > > They affirmed that the three countries should play a greater role > > in reversing the downward trend of the world economy and return it to > > the path of sustainable growth. > > > Moreover, in order to counter protectionism, they pledged efforts > > to reach an ambitious, balanced and comprehensive conclusion of the > > Doha Development Agenda as early as possible. > > > The three leaders pledged to refrain from setting new barriers to > > investment and trade in goods and services, imposing new export > > restrictions, or implementing WTO inconsistent measures to stimulate > > exports within the next 12 months. > > > It is vital to promote cooperation among Asian countries not only > > in the financial sector but also in the real economy, they said. > > > They agreed that measures aimed at promoting growth and expanding > > domestic demand are of vital significance. > > > Therefore, they decided to strengthen trilateral cooperation to > > overcome the negative impacts of the global financial storm and > > achieve sustainable development in Asia.- Hide quoted text - 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