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Japan, South Korea and China to Create Foreign Reserve Pool

May 4, 2008 at 14:52 by Andriy Moraru

Association of Southeast Asian NationsAccording to the Finance Minister of Japan, Fukushiro Nukaga, Japan, South Korea and China are in the process of creating the mutual pool of $80 billion foreign currency reserves in order to protect the Asian financial markets in case of a speculative attacks.

Other Asian countries will also participate in this fund, but the major part (around 80%) will be contributed by Japan, South Korea and China. While the exact shares of the reserve fund’s contributions haven’t been decided yet, the discussion with the other members Association of Southeast Asian nations forum is alive.

This issues has been discussed by the finance ministers of the Asian countries during the annual meeting of the Asian Development Bank today. And the whole discussion is the second part of the process started last year when the ministers agreed to set aside part of their foreign reserve funds for the emergency protection.

The main purpose of the pool is to prevent the financial disasters, like the one that caused a crisis ten years ago in Asia. Now Asian countries try to create a regional alternative to the International Monetary Fund, which would allow them not to fall into dependence on the external money sources (such as U.S. and Europe) if the problems will start.

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