China, Japan, South Korea and the Southeast Asian countries are strengthening the multilateral currency swaps mechanism, The Wall Street Journal reports. A group comprising the Association of Southeast Asian Nations (Asean) and three developed Asian countries, has set up the Asean plus three Macroeconomic and Research Office (AMRO), a surveillance unit that will issue an early warning if any financial support is needed.

The plan is part of a deal signed between the countries in 2009, when they created a $120 billion fund, the Chiang Mai Initiative, for multilateral currency swaps. AMRO, which will become operational from May 1 in Singapore, will have its first director from China and the next from Japan as they have the most stakes in the fund. China, including Hong Kong, invested $38.4 billion in the fund, the same amount as Japan.

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