Japan, Singapore ink 2nd swap pact under Chiangmai Initiative

SINGAPORE, Nov. 9 Kyodo

Singapore and Japan have signed a second bilateral swap arrangement under the Chiang Mai Initiative, according to a joint statement issued by the two sides Wednesday.

The Bank of Japan and the Monetary Authority of Singapore inked the agreement on Tuesday, said the statement released by Japan's Finance Ministry, the BOJ and Singapore's central bank.

The agreement enables the two monetary authorities to swap their local currencies against the U.S. dollar, with Singapore allowed to swap up to $3 billion while Japan can swap up to $1 billion.

The two countries also agreed to boost to 20 percent from 10 percent previously the size of swaps that can be withdrawn without tapping on International Monetary Fund-approved programs.

The agreement is part of the second stage of the Chiangmai Initiative which finance ministers of ASEAN, Japan, China and South Korea agreed to in Istanbul in May this year.

Japan and Singapore concluded their first one-way bilateral swap arrangement from Japan to Singapore amounting to $1 billion in November 2003.

The Chiang Mai Initiative, named after the northern Thai resort where it was agreed to in May 2000 by the 10 members of the Association of Southeast Asian Nations plus Japan, China and South Korea, consists of a web of at least 16 central bank currency swap lines totaling about $40 billion.

It is meant to act as a safety net to protect the region's currencies in the case of a repetition of the 1997 Asian financial crisis.

ASEAN groups Singapore, Indonesia, Malaysia, Brunei, Thailand, the Philippines, Laos, Vietnam, Cambodia and Myanmar.

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