South Korea has today announced swap agreements with Japan and China. In addition, Japan, China and South Korea have agreed to initiate annual summits. This is obviously positive for South Korea. More importantly, the swap agreements demonstrate that we are moving towards closer co-ordination of economic and exchange rate policies within Asia. This could become a major theme in 2009, as the strong currencies of Japan and China obviously have an interest in increasingly anchoring other Asian currencies to JPY and CNY. This is the main motivation for Japan and China entering into these bilateral swap agreements and pushing for turning the bilateral swap agreements into a multilateral arrangement in 2009. The Asean +3 (Asean countries, Japan, China and South Korea) countries in principle have already agreed to launch a multilateral swap facility by May 2009 to help stabilise exchange rates within Asia.