Asean+3 set to okay hike in Chiang Mai fund access, says Manila central bank

April 25, 2012

MANILA, April 25 — Finance and central bank chiefs of Japan, South Korea, China and Southeast Asian countries are expected to approve next week a plan to raise countries' access to a regional fund to avert currency volatility, a senior Philippine official said on Wednesday.

The Asean+3 regional grouping is set to take up a proposal to increase from the current 20 per cent the amount a country can quickly tap from the Chiang Mai Initiative fund without a programme with the International Monetary Fund, Diwa Guinigundo, central bank deputy governor, told Reuters.

The level of increase is still under discussion, the official said.

The rest of what's available to a country from the fund is tied to an IMF programme.

Guinigundo also said the Philippine central bank would keep interest rates at historically low levels for now, with most economic indicators pointing to faster growth and manageable inflation this year.

The Southeast Asian economy may have expanded more than 4 per cent in the first quarter from a year earlier, and the government's 5 to 6 per cent growth target this year appears to be "very realistic," Guinigundo said in an interview at his Manila office.

"Most considerations point to keeping rates steady at this time," he said.

The Bangko Sentral ng Pilipinas left the overnight borrowing rate unchanged at a record low 4 per cent at its April 19 meeting and, with inflation subdued, most economists expect it would keep the rate at that level for the rest of the year. — Reuters