Having survived a series of financial emergencies, Asian economies should concentrate on arranging currency swaps and initiatives to establish a safety net, experts said on Tuesday.
Their comments came during the concluding day of a two-day conference on Asian financial cooperation. The event took place in Mumbai, India's financial capital.
"Bilateral swaps work well," said Wang Dan, deputy director-general of the People's Bank of China, the country's central bank. "Although the yuan is not yet fully convertible, bilateral swaps have contributed to stability, trade and investment in the region."
Wang said China arranged its first agreement to swap local currency with the Bank of Korea, South Korea's central bank, in 2008. "Though it was not acted on, it made the won stable," she said.
Thus when the 180 billion yuan ($28.9 billion) agreement expired last year, it was followed by a new one that doubled the original amount.
Following the financial crisis of 2009, Malaysia and Indonesia signed swap agreements with China to bring stability to the regional market, provide short-term liquidity and boost confidence.
The same year, China's central bank signed a swap agreement with the Hong Kong Monetary Authority, Wang said.
"By now, we have 18 currency swap agreements worth a total of 1.6 trillion yuan," she said.
They involve countries such as Australia, Belarus and Brazil.
"Such agreements not only lead to short-term liquidity but also ease trade conditions," Wang added.
"Some countries' currencies are not fully convertible, and they find it difficult to obtain loans. With these swaps, they can save their US dollar reserves."
Traffic accident injures 40 people in HK
Feedback
RSS
