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Japanese Finance Minister Taro Aso flashes a grin at the meeting of Japanese and ASEAN finance and central bank chiefs in Yokohama on May 5. (Photo by Kosaku Mimura)

Japan agrees to currency swap deals with Thailand, Malaysia

Agreements aimed at boosting ASEAN's resilience to financial crises

SHOTARO TANI, Nikkei staff writer | Japan

YOKOHAMA -- Japan has signed a bilateral currency swap deal with Thailand, a move aimed at strengthening the Association of Southeast Asian Nation's resilience to future financial crises. Under the agreement, the two countries will be able to swap their currencies with U.S. dollars when needed, with the size of the facility set at a maximum of $3 billion.

A currency swap deal allows signatories to borrow dollars from one another. Being the global reserve currency, the dollar tends to run dry in times of financial crisis. Asia experienced the adverse effects of this phenomenon most keenly during the Asian Financial Crisis of the late 1990s.

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