Document Type

Case Study

Case Series

Central Bank Swap Lines


Established on August 5, 1977, by the five central banks of the Association of Southeast Asian Nations (ASEAN), the ASEAN Swap Arrangement (ASA) was one of several regional financial safety nets developed during a decade defined by macroeconomic instability, with the collapse of the gold standard and an oil crisis. Each of the five ASEAN members (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) agreed to contribute one-fifth to a commitment pool of USD 100 million to provide short-term dollar swaps to any pool member experiencing temporary foreign exchange liquidity issues. The ASA provided swaps with maximum maturities of three months, subject to renewal. A member central bank served as the administrator of swap activation, renewals, and agreement disputes and modifications. In 1978, the ASEAN central banks increased the commitment pool to USD 200 million. Between 1977 and 2000, ASEAN members borrowed on the pool five times to address minor payment difficulties; it was not activated at all during the Asian Financial Crisis of 1997–1998. In 2000, as part of the Chiang Mai Initiative, the ASA added five additional ASEAN member countries (Brunei, Cambodia, Laos, Myanmar, and Vietnam) and increased the pool to USD 1 billion. In 2005, the pool doubled to USD 2 billion, and did not increase again through 2021. Since 1977, the ASA memorandum of understanding had a term of between one and five years. It was repeatedly renewed or supplanted with a new agreement. However, the most recent agreement expired on November 16, 2021, and has yet to be renewed. The small size of the ASA limited its capacity to address significant foreign exchange problems but nonetheless proved a symbol of early regional cooperation.