No products in the basket.
Thai government to issue US$1 billion foreign currency-denominated bonds
Issuing bonds overseas will expose Thailand to exchange rate risk, making the repayment of international debt more costly if the baht devalues
The Thai government has recently announced its consideration to issue foreign currency-denominated bonds valued at US$1 billion, approximately 36 billion baht. This announcement has sparked debates over the worth and risks associated with such an undertaking.
If these bonds are released in US dollars, it would be a landmark occasion as the first such issuance by the Thai government in 20 years. The last instance of foreign currency bond issuance took place in 2005, when the government released 48 billion yen (equivalent to US$318,794,400) worth of three-year Samurai bonds to refinance a maturing loan from the Japan Bank for International Cooperation.
Key Takeaways
- The Thai government plans to issue foreign currency-denominated bonds valued at US$1 billion, with US dollars being the most likely choice due to their widespread use and benchmark status.
- While foreign currency bond issuance offers a financing alternative for Thailand, it also exposes the country to exchange rate risk and higher borrowing costs based on interest rates.
The Public Debt Management Office (PDMO) under the Finance Ministry is examining the feasibility of offering these bonds in several currencies, including US dollars, yuan, and yen.
Support authors and subscribe to content
Subscribe to read the entire article.
Login if you have purchased
Discover more from Thailand Business News
Subscribe to get the latest posts sent to your email.
