Japan, Thailand expand currency swap pact |
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Tue, 10 Jul 2007 12:30
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TOKYO (Thomson Financial) - Japan said Tuesday it had doubled the amount of foreign currency reserves it makes available to Thailand to shield against a possible financial crisis.Under the bilateral arrangement, Japan will now offer up to 6 billion US dollars from its foreign exchange reserves to Thailand in the event of a currency crisis, a finance ministry statement said.Previously, it had made up to 3 billion dollars available in exchange for the baht.Thailand for its part will continue to provide up to 3 billion dollars to Japan in exchange for yen if needed.The pact is part of the Chiang Mai Initiative of bilateral currency swaps set up by Southeast Asian nations plus Japan, China and South Korea in May 2000 as part of efforts to prevent a repeat of the 1997 East Asian financial crisis.Asia now holds the bulk of the world's foreign reserves at some 2.7 trillion dollars, led by China, which alone has more than 1.0 trillion dollars.Asian finance ministers agreed in May to pool part of their huge forex reserves to enable a country to borrow foreign currency from another more quickly until a crisis passes.afp/zrzr/zrCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
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