Asian finance ministers mull creation of currency swap fund

MADRID, May 4, 2008 (AFP) – Asian nations are in talks over the creation of a multinational 80-billion-dollar (52-billion-euro) foreign exchange pool to be used in case of another regional financial crisis, Japanese Finance Minister Fukushiro Nukaga said Sunday in Spain. “We are negotiating in that direction,” he told reporters at the annual meeting of the Asian Development Bank in Madrid when asked about the amount of funds which are reportedly going to be set aside for the currency swap scheme.

Nukaga met earlier on Sunday with his Chinese counterpart Xie Xuran and South Korean Finance Minister Kang Man-soo on the sidelines of the gathering, which is held outside of Asia every two years.

An agreement is expected to be announced after the finance ministers from the so-called ASEAN+3 group — the 10 members of the Association of Southeast Asian Nations plus Japan, China and South Korea — meet later on Sunday at the gathering.

The 13 nations agreed after the 1997-98 Asian financial crisis set up a bilateral currency swap scheme known as the Chiang Mai initiative to prevent a repeat of the turmoil.

At the ADB’s last annual meeting in Japan in May 2007, they agreed to work towards a multi-nation scheme of currency swaps to make it easier to borrow emerge