• Source: Asian Clearing Union

The Asian Clearing Union (ACU) was established on December 9, 1974, at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The primary objective of ACU, at the time of its establishment, was to secure regional co-operation regarding the clearing of eligible monetary transactions among the members of the Union to provide a system for clearing payments among the member countries on a multilateral basis.




Objectives


To facilitate settlement of payments on a multilateral basis,
To promote the use of participants' currencies,
To promote monetary co-operation among the participants,
To provide for currency swap arrangement among the participants.




Settlement Process


Period: Bimonthly Settlement
Payment Deadline: T+4




Currency Swap Arrangements


Eligibility: Any participant in net deficit
Time of request: Before the end of a settlement period
Amount: 20% of the average gross payments (ACU dollar/euro/yen accounts collectively) made by every eligible participant
Rate: linear interpolation of Chicago Mercantile Exchange: CME SOFR one month and three month for US Dollar, the EURIBOR two month for Euro, two month LIBOR declared by the ICE for Japanese Yen

Benefits:

Easy access to international reserves of other participants
Availability of the facility on a multilateral basis
The opportunity for further monetary co-operation




Units of Accounts


AMU: Asian Monetary Units (viz. ACU dollar, ACU euro, and ACU yen),
The AMUs are denominated as ACU dollar, ACU euro, and ACU yen which are equivalent in value to 1 USD, 1 Euro, and 1 JPY, respectively.




Interest


Payable by the net debtors at the end of each settlement period,
Calculated on the daily outstanding between settlement dates,
Interest rate will be the closing rate on the last Monday of the previous calendar month offered by Chicago Mercantile Exchange Secured Overnight Financing Rate (CME SOFR) term one month for US Dollar, the Euro Interbank Offered Rate (EURIBOR) one month for Euro, and the Inter-Continental Exchange (ICE) for one month Japanese Yen deposits




Exchange Rate


The SDR cross-rates which are quoted by the IMF on a daily basis are applied as a reference rate.




Benefits of Becoming a Member


Saving Forex reserves through multilateral netting and bi-monthly settlement,
Addressing trade imbalances and expanding of trade and monetary cooperation between members,
No need to accumulate the currencies of other members,
Access to new markets and monetary integration and financial deepening,
Possibility of using USD, EUR, and JPY as reserve currencies,
No membership fee,
Higher clearing efficiency,




Members


Currently 2024, the members of ACU are the central banks of Bangladesh, Bhutan, Iran, India, Maldives, Nepal, Pakistan, Sri Lanka, and Myanmar. The central banking authorities of member countries have issued detailed instructions and modalities for channeling the monetary transactions through the ACU. Membership in the ACU is open to central banks located in the geographical area of ESCAP and non-ESCAP.




Eligible transactions


All eligible transactions between member countries are required to be cleared through the Asian Clearing Union. The monetary transactions eligible to be settled through the Asian Clearing Union include the following:

From a resident of one participant to a resident of another participant,
Related to import and export of goods and services,
Permitted by the country in which the payer resides,
Not declared ineligible by the BOD or a participant.




Instruments of Payment


All instruments of payment denominated in AMUs (ACU dollar, ACU euro, and ACU yen), may be used to effect payment through the clearing facility.




Figures


Transactions channeled through the ACU mechanism in 2021 amounted to 29 billion USD.




References


Official website

Kata Kunci Pencarian:

• Otoritas Moneter Maladewa
• Bank Bangladesh
• Bank Sentral Sri Lanka
• Bank Sentral Republik Islam Iran
• Bancor
• Hubungan India dengan Iran
• Bumi
• Theravāda
• Portland, Oregon
• Asian Clearing Union
• South Asian Free Trade Area
• International Clearing Union
• Reserve Bank of India
• Asia Cooperation Dialogue
• South Asian Association for Regional Cooperation
• Nepal Rastra Bank
• Asian Development Bank
• Bangladesh Bank
• Bandung Conference