In response to the Asian Financial Crisis, ASEAN+3 member authorities decided in 2000 to strengthen their financial cooperation through the establishment of the Chiang Mai Initiative (CMI), comprising a network of bilateral swap agreements among members. The CMI was multilateralised into a single contractual agreement called the Chiang Mai Initiative Multilateralisation (CMIM) Agreement, which came into effect on 24 March 2010.
The CMIM is a multilateral currency swap arrangement for liquidity support among ASEAN+3 members, established at USD120 billion. Its core objectives are to: (i) address balance of payment and/or short-term liquidity difficulties in the ASEAN+3 region, and (ii) supplement existing international financial arrangements. The evolution of the CMI into the CMIM marked an important milestone, exemplifying the members’ strong commitment to continuously improving and promoting financial stability in the region.
The contracting parties to the CMIM Agreement comprise the finance ministries and central banks of ASEAN+3 countries (Brunei Darussalam, Cambodia, China, Indonesia, Japan, Korea, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam), and the Hong Kong Monetary Authority.
The CMIM was further strengthened in 2014 by doubling the size of the facility to USD240 billion, increasing the CMIM-International Monetary Fund (IMF) de-linked portion to 30 percent, and extending the maturity and supporting periods. A crisis prevention facility — the CMIM Precautionary Line — was also introduced, in addition to the existing CMIM Stability Facility; the latter of which is for crisis resolution.
In March 2021, members amended the CMIM Agreement to increase the IMF de-linked portion to 40 percent from 30 percent of each members’ maximum arrangement amount, and to institutionalize the use of local currencies, in addition to the U.S. dollar, for CMIM financing on a voluntary and demand-driven basis.
CMIM members have repeatedly affirmed their commitment to further strengthening the CMIM as part of the regional financial safety net. The CMIM has also been enhanced through, for instance, test runs, revisions of the Operational Guidelines, and periodic reviews.