This Scheme had worked fairly well for about eight years, but was cumbersome to operate since each participant had to keep individual accounts for all the other participants. Moreover, the bilateral arrangements did not produce meaningful economies in the use of foreign exchange.
The CMCF sought to correct this by: •  facilitating settlement of eligible transactions on a multilateral basis;  •  promoting the use of member currencies in settling eligible trade transactions and thereby effecting economies in the use of their country’s foreign exchange reserves; and  •  encouraging monetary cooperation among participants and closer relations among banking systems, and in so doing, contribute to the expansion of trade and economic activity in the region.