Finance ministers from the Asean plus three countries
meeting on the sidelines of the ADB meeting warned that "high
levels of public and private debt" in some Asian economies
would pose a threat if financial market volatility were to
They also urged advanced economies that had been pursuing
accommodative monetary policies to be "mindful of the impact on
the global and regional economies" as they began to normalise
The ministers from the 10 Asean countries plus Japan, China
and South Korea met against a background of rising unease over
the possible impact on capital flows of monetary tapering and
eventual hiking of interest rates.
They pledged to further strengthen the Asian monetary
arrangement known as the Chiang Mai Initiative
Multilateralisation (CMIM) as part of a "regional safety net"
to be used if capital flows should again be disrupted. This
will involve accelerating its implementation
At the same time, they agreed to boost the capacity of the
Asean+3 Credit Guarantee and Investment Facility (CGIF) in
order to boost local currency bond markets in Asia.
Asean+3 has been trying to increase the use of Asian local
currencies in trade settlements and investment within the
Bank of Japan governor Haruhiko Kuroda said after
yesterday's meeting that, instead of relying upon one currency
- the dollar - it would be healthier to have several key
currencies including the euro and currencies from Asia and
other developing regions.
The Asean+3 countries "posted steady growth last year and
are poised to sustain this momentum in 2014," the ministers
said in a communique.
But they noted that "accommodative monetary policies in
advanced economies will normalise in due course, with the
timing being conditional upon on the outlook for price
stability and economic growth.
"The conduct of monetary policy should be communicated early
and calibrated carefully [bearing in mind] the impact on the
global and regional economies."
Economies "with domestic structural weaknesses such as high
inflation, large current account deficits and substantial
fiscal imbalances tend to be vulnerable to tightening financial
"To address these conditions, greater emphasis [should be]
placed of maintaining sustainable current account balances and
manageable fiscal balances.