IMF WOULD LIKE TO JOIN ASEAN+3
The International Monetary Fund (IMF) plans to integrate the loan facility owned unconditionally, Flexible Credit Line, with the Chiang Mai Initiative Multilateralism. IMF Managing Director Dominique Strauss-Kahn confirmed that the financial institutions want to strengthen cooperation with Asian countries in terms of providing insurance system in the world financial system to avoid and overcome the crisis. He considered pooling foreign exchange reserves in Asia Chiang Mai Initiative Multilateralism (CMIM) plays an important role in providing a financial system safety. CMIM also believed to be a complement IMF loan facility. “We must find a way how to combine the Chiang Mai Initiative of ASEAN +3 and Flexible Credit Line facility to make it more effective,” he said in an annual lecture Singapore’s central bank the Monetary Authority of Singapore, last weekend. Strauss-Kahn realized combining efforts with CMIM FCL is not an easy job.
But so far, he argued, the IMF continues to remove the stigma of the frame overhaul its lending facilities to better suit the needs of member countries in need. “Chances are that continued success of FCL and increase access to IMF financing crisis. Members who do not qualify for FCL, we could have designed a number of alternative instruments that automatic mode can be accessed.” Chiang Mai Initiative is a scheme of collecting foreign exchange reserves totaling U.S. $ 120 billion between the Asean +3 countries. Funds from the planned scheme implemented before the end of this year can be withdrawn at any time through the exchange (swap) in case of currency disturbances of the balance of payments.
As, FCL is an instrument of the IMF loan, which was launched since October last year with faster characteristics and unconditionally. These loans can only be accessed by member countries with strong economic performance but the risk of contracting the balance of payment crisis. Maturity period is longer, ie 3.25 years-5 years.