SINGAPORE, March 31, 2021 –
- The amended Chiang Mai Initiative Multilateralisation (CMIM) Agreement, which is a regional financing arrangement among the Finance Ministers and Central Bank Governors of the ASEAN member states, China, Japan and Korea (ASEAN+3) and the Monetary Authority of Hong Kong, China, came into effect on 31 March 2021.
- The key features of the amendment to the CMIM Agreement are as follows:
- To increase the International Monetary Fund (IMF) De-linked Portion from 30 percent to 40 percent of each member’s maximum arrangement amount;
- To institutionalize the use of members’ local currencies, in addition to the U.S. dollar, for CMIM financing on a voluntary and demand-driven basis; and
- To address other technical issues, including revisions related to the London Inter-bank Offered Rate (LIBOR) reform.
Please refer to the Annex for more details.
- The amendment serves to further enhance the CMIM, which stands at the center of the regional financial safety net of the ASEAN+3, making it more effective and operationally ready for member economies.
ANNEX: Key features of the amendment to the CMIM Agreement and the Operational Guidelines
- Increase the IMF De-linked Portion
The IMF De-linked Portion is the amount each member may request from the CMIM when there is no matching IMF supported program. The amendment increases the IMF De-linked Portion from 30% to 40% of each member’s maximum arrangement amount, making the CMIM more readily available to the countries in need.
- Institutionalize local currency contribution to the CMIM
The amendment makes members’ local currencies available for the provision of liquidity support under any CMIM arrangement within the CMIM’s total financing capacity of USD240 billion. Local currency financing under the CMIM will be on a voluntary and demand-driven basis for the arrangement requesting parties, as well as arrangement providing parties.
- Address technical issues
The amendment includes revisions related to the LIBOR reform. It also addresses other technical adjustments, such as information sources for foreign exchange rate determination, a time limit for swap executions, and the meeting format for the CMIM decision-making body.