ACU

1974

INTRODUCTION OBJECTIVES Secretary General settlement periods by a decision taken by unanimous vote of all of the Directors. Asian Clearing Union (ACU) is the simplest form of • To provide a facility to settle payments, on a multilateral The Board is authorized to appoint a Secretary General payment arrangements whereby the participants settle basis, for current international transactions among for a term of three years. The Secretary General may Interest payments for intra-regional transactions among the the territories of participants; be reappointed and shall cease to hold office when the Interest shall be paid by net debtors and transferred to participating central banks on a multilateral basis. The Board so decides. • To promote the use of participants’ currencies net creditors on daily outstandings between settlement main objectives of a clearing union are to facilitate in current transactions between their respective Agent dates. The rate of interest applicable for a settlement payments among member countries for eligible territories and thereby effect economies in the use period will be the closing rate on the first working day transactions, thereby economizing on the use of foreign The Board of Directors may make arrangements with of the participants’ exchange reserves; of the last week of the previous calendar month offered exchange reserves and transfer costs, as well as a central bank or monetary authority of a participant by the Bank for International Settlements (BIS) for one promoting trade among the participating countries. The • To promote monetary cooperation among the to provide the necessary services and facilities for the month US dollar and Euro deposits. ACU is a clearing union among other clearing houses/ participants and closer relations among the banking operation of the clearing facility. The Board has accepted payments arrangements operating in various regions of systems in their territories and thereby contribute to the offer of the Central Bank of the Islamic Republic of Membership the world. the expansion of trade and economic activity among to act as agent for the Union. Membership in the ACU is open to the central bank, the countries of the ESCAP region; and Language treasury or the monetary authority of each regional ESTABLISHMENT • To provide for currency SWAP arrangement among member and associate member of the ESCAP located The official language of the ACU is English. The ACU was established at the initiative of the United the participants so as to make Asian Monetary Units in the geographical area defined in the ESCAP’s terms Nations Economic and Social Commission for Asia (AMUs) available to them temporarily. of reference. A central bank or monetary authority ACU OPERATIONS and the Pacific (ESCAP). The decision to establish the that is eligible to participate may apply to the Board of ACU was taken at the Fourth Ministerial Conference ACU ORGANIZATION Directors to become a participant and be admitted as a Units of Accounts on Asian Economic Cooperation held in December participant if the Board so decides by a two-third vote of 1970 at Kabul. The Draft Agreement Establishing the Board of Directors The accounts of the ACU shall be kept in the AMUs all the Directors and upon such central bank or monetary ACU, was finalized at a meeting of senior officials of (viz. ACU dollar and ACU euro). The AMUs shall, authority signing the Agreement and accepting the rules, Each participant appoints one Director and one the governments and central banks held at ESCAP, with effect from 1st January 2009, be denominated as regulations and decisions of the Board of Directors. Alternate Director. The Board elects a chairman and Bangkok, in December 1974 after five central banks ‘ACU dollar’ and ‘ACU euro’. The Chairman of the Board shall determine the date on a vice-chairman from among its members. The Board (, Iran, , and ) signed the which the payments and transfers with respect to such meets at least once a year. All decisions of the Board Settlement Period Agreement. and were the sixth a participant shall be included in the clearing facility. of Directors are taken by a majority of the votes of all and seventh signatories to this Agreement. Settlement of net position and accrued interest takes Directors unless a special majority is required by the Composition signed the Agreement in 1999 and the number of the place at the end of each two monthly settlement period. Agreement. ACU participants reached eight. The Board of Directors may change the length of the At present, the ACU enjoys the membership of the ACU

1974 following eight participants: among the participants. • Bangladesh Bank • Royal Monetary Authority of Bhutan ACU ACHIEVEMENTS • ACU • Central Bank of the Islamic Republic of Iran Rapid Expansion of Trade • Central Bank of Myanmar Since the inception of the ACU, transactions have ASIAN 1974 • experienced a remarkable growth. CLEARING • State Bank of Pakistan UNION • Central Bank of Sri Lanka No Default Relations with Other Organizations and Under the ACU Procedure Rules, the debtor participants ACU Clearing Arrangements should pay their dues in convertible currencies within 207/1, Pasdaran Avenue four working days of the receipt of the notice of payment P.O. Box: 15875/7177 There is no prohibition for the participants to cooperate from the Secretary General. The experience of the I.R. Iran with other general, regional or sub-regional international ACU’s operations from the inception to date proves Tel: +98 21 22842076 organizations or other payment arrangements among +98 21 22854509 that this requirement has been solemnly fulfilled by Fax: +98 21 22847677 countries within or outside the ESCAP region. each participant on each and every occasion. There E-Mail: [email protected] EARING UNION Currency Swap Arrangement has been no default by any participant so far in meeting www.asianclearingunion.org ASIAN CL ACU its obligation for the settlement of its net position within The main objective of the SWAP arrangement is to the stipulated time period. In comparison to other extend short-term foreign exchange support by providing clearing arrangements among developing countries, participants access to the international reserves of other the achievement of “zero default” is landmark of the J a participants in times of temporary liquidity problems. n

success of the ACU. u The potential benefits of the SWAP facility are: a ry

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• Easy access by participants to international reserves GENERAL PUBLICATIONS 2 0

0 of other participants at a time when foreign exchange 9 • Annual Report of the ACU is published once a year support is needed; with the approval of the Board of Directors. • Availability of the facility on a multilateral basis rather • Monthly Newsletters are published at the beginning than on a bilateral basis; and of the month, outlining the activities and operations • The opportunity for further monetary cooperation of the ACU in the preceding month.