By NG MIN SHEN / Pic By AFIF ABD HALIM

Malaysia renewed its commitment to the Asean Swap Arrangement (ASA), a pact created to provide monetary support to Asean countries.

Bank Negara Malaysia said governor Tan Sri Muhammad Ibrahim (picture) signed the memorandum of understanding (MoU) on behalf of ASA Malaysia at the annual meetings of the International Monetary Fund and the World Bank Group in Washington last Friday.

“Rendering a total of US$2 billion (roughly RM8.44 billion) in financial support, Asean central banks and monetary authorities have agreed to renew the MoU on the ASA for another two years from Nov 17, 2017,” it said in a statement.

The ASA was set up in 1977 to represent financial cooperation among Asean countries to promote financial stability through the provision of short-term liquidity support for member countries experiencing temporary balance of payment difficulties.

The first MoU on the pact signed in August 1977, facilitating US$100 million — which was increased a year later to US$200 million, involved five Asean monetary authorities, namely Indonesia, Malaysia, the Philippines, Thailand and Singapore.

In 2000, a new ASA was signed to provide US$1 billion in financial aid due to the Asian financial crisis which in turn, expanded the membership to include Brunei Darussalam, Cambodia, Laos, Myanmar and Vietnam.

The agreement, available for two years, is subject to renewal upon mutual agreement by the 10 participating members, provided an enlargement in the size of the swap facility from US$200 million to US$1 billion.

Request for temporary liquidity or balance of payments assistance will be confirmed through the agent bank (appointed on a rotation basis based on alphabetical order every two years), in line with its role as a rapid disbursement facility.