KUALA LUMPUR (April 1): The amended Chiang Mai Initiative Multilateralisation (CMIM) agreement, a regional financing arrangement among the finance ministers and central bank governors of the ASEAN member states, as well as China, Japan and South Korea (ASEAN+3), in addition to the Monetary Authority of Hong Kong, came into effect yesterday (March 31, 2021).
In a statement today, Bank Negara Malaysia (BNM) said among key features of the amendments to the agreement are to increase the International Monetary Fund (IMF) de-linked portion to 40% from 30% of each member’s maximum arrangement amount.
“The IMF de-linked portion is the amount each member may request from the CMIM when there is no matching IMF-supported programme.
“The increase in the IMF de-linked portion to 40% of each member’s maximum arrangement amount makes the CMIM more readily available to the countries in need,” it said.
BNM said the second amendment is to institutionalise the use of member countries’ local currencies, in addition to the US dollar, for CMIM financing on a voluntary and demand-driven basis.
“This amendment makes member countries’ local currencies available for the provision of liquidity support under any CMIM arrangement within the CMIM’s total financing capacity of US$240 billion (about RM994.92 billion),” it said.
It said local currency financing under the CMIM will be on a voluntary and demand-driven basis.
The central bank said the third amendment is to address other technical issues, including revisions related to the London Interbank Offered Rate (LIBOR) reform.
“It also addresses other technical adjustments, such as information sources for foreign exchange rate determination and the meeting format for the CMIM decision-making body to include flexibility of organising virtual meetings,” it said.
It added that the amendments serve to further enhance the CMIM, which stands at the centre of the regional financial safety net of the ASEAN+3, making it more effective and operationally ready for the member economies.
