ASEAN+3 finance ministers and central bank governors on Sunday signaled readiness to respond to rising market volatility and shifting liquidity conditions amid war in the Middle East.
Policymakers from the 10 members of the Association of Southeast Asian Nations, along with China, Japan and South Korea, said they were closely monitoring developments in global financial markets, particularly the impact of tighter liquidity, elevated interest rates, and volatile capital flows.
“Asean+3 entered 2026 from a position of relative strength, supported by stronger-than-expected growth in 2025, low inflation, and improved external buffers,” they said in a joint statement issued in Samarkand, Uzbekistan at the sidelines of the Asian Development Bank’s annual meeting.
“However, the escalation of conflict in the Middle East has amplified downside risks to the regional outlook significantly.”
The ministers and central bank governors reaffirmed a commitment to “sustained policy dialogue to safeguard macroeconomic and financial stability.”
“We will remain attentive to risks stemming from excessive volatility and disorderly movements in financial markets and shifts in global liquidity conditions, and stand ready to respond in line with the domestic conditions,” they said.
Officials flagged continued volatility in capital flows as a key concern, particularly for emerging Asian economies that remain sensitive to external shocks.
They said that rapid changes in global liquidity conditions could trigger destabilizing movements in exchange rates and asset prices, and underscored the importance of strong macroeconomic fundamentals and policy buffers.
To mitigate such risks, the Asean+3 bloc reiterated its commitment to maintaining sound monetary and fiscal policies alongside strengthening financial sector resilience.
The officials also stressed the importance of clear communication and policy coordination in managing market expectations and avoiding disorderly adjustments.
Regional cooperation critical
Amid these risks, the group highlighted the role of regional cooperation mechanisms in safeguarding financial stability.
They reaffirmed their commitment to enhancing surveillance under the Asean+3 Macroeconomic Research Office (AMRO), which provides macroeconomic monitoring and risk assessments for member economies.
The officials said timely data sharing and policy dialogue would be critical in identifying vulnerabilities early and ensuring coordinated responses to emerging risks.
“We are also committed to strengthening the region’s resilience to external shocks, while ensuring fiscal sustainability,” they said.
“In this context, we welcome members’ collective efforts on regional cooperation to strengthen energy security and supply chain resilience across the region, including Japan’s recent launch of Partnership On Wide Energy and Resources Resilience (POWERR Asia),” they added.
They also highlighted the role of regional financial safety nets, particularly the Chiang Mai Initiative Multilateralisation (CMIM), in providing liquidity support during times of crisis.
The group reiterated its commitment to further strengthening the CMIM to enhance its responsiveness and effectiveness in addressing sudden capital outflows and liquidity shortages.
In addition, the ministers and governors stressed the importance of deep and well-functioning local currency bond markets to reduce reliance on foreign currency borrowing and mitigate exposure to exchange rate volatility.
“Building on local currency‑based payment systems, technological innovation in cross‑border payments, such as tokenization, should be pursued in consistency with ongoing global discussions on policy and regulatory frameworks to support safe, efficient, and integrated regional payments, while carefully assessing implications for monetary sovereignty, financial stability, and capital flow management,” they said.
They expressed appreciation to the Philippines and Japan for their hospitality and strong coordination as co-chairs of the Asean+3 Finance Ministers’ and Central Bank Governors’ Process in 2026.
They agreed to meet in Nagoya, Japan in 2027 and said they were looking forward to working with Singapore and Korea as next year’s co-chairs. NIÑA MYKA PAULINE ARCEO