Asia’s largest economies made a decision that could signal a shift away from the US dollar on Sunday, as they approved a new rapid financing mechanism that will for the first time use regional currencies including the Chinese yuan.
It may also herald a deeper, longer-term shift towards a regional monetary mechanism that is less reliant on the dollar – and gives China a bigger role.
In this explainer, the Post breaks down the details of the new financing mechanism, and what it means for the future of Asia and the dollar-based global financial system.
What is the context behind this decision?
The new rapid financing mechanism is part of a broader scheme known as the Chiang Mai Initiative Multilatalisation (CMIM) – a currency swap arrangement among the 10-member Association of Southeast Asian Nations (Asean), China, Japan and South Korean.
