discuss expanding currency-swap

China, Japan, Korea to Mull Boosting Bilateral Swaps (Update1)

By Keiko Ujikane and Seonjin Cha

Nov. 15 (Bloomberg) -- China, Japan and South Korea agreed to enhance economic cooperation and consider boosting bilateral currency swaps, according to a statement from the countries' finance ministers.

The ministers said they would ``expedite the process'' of the Chiang Mai Initiative on swaps, according to the statement, released after a meeting on the sidelines of the Group of 20 gathering in Washington. South Korea's Finance Ministry sent the statement by e-mail.

``We are mindful of the necessity to enhance our financial cooperation,'' the statement said. The nations agreed to explore increasing ``the size of bilateral currency swap arrangements.''

Finance ministers from 13 Asian nations, including South Korea, Japan and China, agreed in May to create a pool of at least $80 billion in foreign-exchange reserves to be tapped to protect their currencies. That was an expansion of the so-called Chiang Mai Initiative, an agreement that allows countries to lend each other money at favorable terms if help is needed to support their exchange rates.

To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

Last Updated: November 14, 2008 23:32 EST

Japan, China, S. Korea Finance Ministers to Meet This Week

SEOUL/TOKYO, Nov 12 (Reuters) -

Finance ministers from South Korea, Japan and China plan to meet on Friday in Washington to discuss ways to jointly tackle the global financial crisis, officials in Seoul and Tokyo said on Wednesday.

The ministers may discuss expanding currency swap deals in a meeting ahead of a G20 crisis summit, a senior official at South Korea's Finance Ministry told Reuters.

"We have not set agendas for the meeting. But it should be difficult to remove the (currency swap lines) issue. That may be an agenda," said the official, asking not to be identified.

Japanese media reported earlier in the day the trilateral meeting would discuss the possibility of Japan and China expanding bilateral swap lines with South Korea at a time when the South Korean won <KRW=> has been tumbling due to the gloomy economic outlook.

On Friday, Japan's top government spokesman, Takeo Kawamura, told a news conference that the three ministers were likely to discuss how the three Asian countries could work together to tackle the crisis, but added he was not aware of any details.

As part of a regional network of bilateral currency swaps, called the Chiang Mai Initiative (CMI), Japan can provide U.S. dollars worth up to $10 billion and Japanese yen worth up $3 billion to South Korea.

South Korea said last week it and China had agreed in principle to expand the existing currency swap agreement in order to better cope with the global financial crisis, with details to be finalised at a working-level officials' meeting in late November.

The idea of the CMI is that a country that finds itself in a short-term liquidity shortage can borrow reserves from partners in the network to absorb any heavy selling pressure on its currency without having to resort, as some countries did in 1997, to a damaging devaluation.

None of these credit lines has been tapped so far.

Finance ministers from Association of Southeast Asian Nations (ASEAN) member nations along with China, Japan and South Korea (ASEAN+3) have been seeking ways to strengthen the CMI and transform it into a more powerful multilateral scheme.

(Reporting by Lee Shin-hyung in Seoul, Yoko Nishikawa in Tokyo, Writing by Cheon Jong-woo; Editing by Jonathan Hopfner)

http://www.reuters.com/article/companyNewsAndPR/idUSSEO15917120081112

By Takashi Hirokawa

Nov. 12 (Bloomberg) -- Finance Ministers from Japan, China and South Korea will hold an emergency meeting this week in Washington ahead of a Group of 20 leaders summit,

Japanese Chief Cabinet Secretary Takeo Kawamura said.

``The three Asian nations will discuss how they can cooperate in dealing with the region's financial crisis,'' Kawamura, the government's top spokesman, said at a press conference in Tokyo today. He said he didn't have details on what topics would be discussed at the gathering.

Leaders from the G-20 are meeting in Washington on Nov. 14 to talk about the global credit crisis.

South Korean Finance Ministry officials have been contacting counterparts in Japan and China to discuss expanding currency-swap arrangements with the two countries. South Korea has a swap agreement of $4 billion with China and $13 billion with Japan.

To contact the reporters on this story: Lily Nonomiya in Tokyo at lnonomiya@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSjxa5WXn6EI