Chiang Mai Initiative

The Chiang Mai Initiative is a regional financial arrangement established in 2000 among Southeast Asian countries, including ASEAN nations and China, Japan, and South Korea. Its purpose is to promote financial stability by providing short-term liquidity support during economic or financial crises. Member countries contribute funds to a shared pool, which can be used to offer emergency loans to members facing balance-of-payments problems. This mechanism helps prevent regional economic crises from spreading and complements other financial safety nets, fostering economic resilience and cooperation within the region.