Page last updated at 14:39 GMT, Sunday, 22 February 2009

Asia set to boost emergency fund

Chinese and US currency
Asian nations have been hit by the wider slowdown

Asian finance ministers plan to extend an emergency currency fund, hoping to boost their economies and better protect them from the financial crisis.

The new size of the multilateral fund is expected to be $120bn (83.7bn), up from $80bn proposed in 2008, regional grouping Asean said.

Emergency funds would be made available to enable nations to borrow foreign currency on a short-term basis.

The plan was agreed at a meeting of Asean finance minister in Thailand.

It is hoped final agreement on the fund will be reached in May, said ministers.

Last year, the ten members of the Association of South-East Asian Nations (Asean) promised to make bilateral currency swap arrangements available to each other under the so-called Chiang Mai Initiative.

Japan, China and South Korea also joined the scheme.

"The Chiang Mai is important because it gives a signal to everybody in Asia and outside Asia that if there was a big crisis, there is financing available," said Jean Pierre Verbiest, Asian Development Bank country director for Thailand.

Asian nations have typically relied heavily on exports and have as a result been hard hit by the global slowdown.

Japan, China and South Korea are set to contribute 80% of the capital to the fund.

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