By Yoon Ja-young
Staff Reporter
Finance ministers from Korea, China and Japan agreed to cooperate to help stabilize the regional currency market, and push for an initiative to further develop the Asian bond market at their annual meeting held in Kyoto, Japan, Friday.
Finance and Economy Minister Kwon O-kyu announced a joint message with Chinese finance minister Jin Renquing and Japanese finance minister Koji Omi, at the seventh meeting of the three countries' finance ministers, held in line with the 40th annual meeting of Asian Development Bank (ADB) board of governors.
``We agreed to cooperate to continue the Asian Bond Market Initiative (ABMI). We have confidence that our joint effort will contribute to the diversification of bond issuers and the regional currency denominated bonds, and to the development of regional bond market,'' the statement said.
The idea of ABMI was first introduced in December 2002 among the three nations to develop the regional bond market further as a means to stem any recurrence of the 1997-1998 Asian currency crisis. They expect ABMI to contribute to the regional economic growth by inducing abundant savings in the region to investment.
The three ministers said the three countries should share information and strengthen policy discussion, faced with potential risk factors such as the slowdown of the U.S. economy and increasing volatility of the regional financial market.
``We are glad that the three economies are continuing solid growth, and we have generally positive views on the regional and global economies for 2007,'' they said in the joint statement. Some potential risk factors, however, need watching over, and the three economies should take appropriate macroeconomic policies to lead solid growth of the global economy, they added.
The three ministers said they welcome the achievements made in the ASEAN-plus-three finance ministers. ASEAN-plus-three refers to the Association of Southeast Asian Nations, comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and the three Northeast Asian countries: Korea, China, and Japan.
``We are pleased that the bilateral swap arrangements (BSA) continues to increase under Chiang Mai Initiative (CMI) system,'' they said.
CMI is a regional accord to fend off currency crisis, adopted during the ASEAN-plus-three meeting held in Chiang Mai, Thailand in 2000. It aims at helping member nations out of financial crisis by making a network of currency swap contracts between member countries.
They emphasized that the CMI system will stick to its aims of solving short-term liquidity problem in the region, and complementing international financial institutes such as the international monetary fund (IMF).
The measures will be discussed at the AEAN-plus-three summit in detail.