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December 29, 2009

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China to give funds to pool

CHINA will contribute US$38.4 billion to the US$120 billion emergency currency swap pool set up under the Chiang Mai Initiative agreement to secure ample liquidity within the surrounding region.

The agreement allows members of the initiative, the 10-member Association of Southeast Asian Nations, China including Hong Kong, Japan and South Korea to tap into a regional pool of foreign exchange reserves to better fend off financial crises, the People's Bank of China said yesterday on its Website.

The pool of money can be used by countries short of liquidity via currency swaps with their local currency for the greenback.

China's contribution is equal to that of Japan, or 32 percent of the pool.

China's mainland will contribute US$34.2 billion, while Hong Kong will provide the other US$4.2 billion.

The pool will be launched on March 24 to upgrade the existing initiative, which was launched in 2000.

The initiative was first launched by five ASEAN nations - Thailand, Malaysia, Indonesia, Singapore and the Philippines - and China, Japan and South Korea after the Asian financial crises in 1997 and 1998.


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