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When Politics hurts credit rating

Ask Thai government officials and they will fume that it is just unfair. How can Thailand be denied an “A” sovereign credit rating when other countries with poorer macro-economic numbers already have that coveted assessment?

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Ask Thai government officials and they will fume that it is just unfair. How can Thailand be denied an “A” sovereign credit rating when other countries with poorer macro-economic numbers already have that coveted assessment?

 

And for the Thais, the obvious comparison is with Malaysia.All three major rating agencies – Standard & Poor’s, Moody’s and Fitch – give Malaysia an A grade. Those same agencies put Thailand at the upper end of the B category, meaning that while Thai bonds are still rated investment grade, they are not regarded as being of the same quality as Malaysia’s.

Securing a high credit rating helps a country access cheap funding on international bond markets.

The macro-economic numbers, however, suggest otherwise. Thailand’s public debt stands at around 44 per cent of gross domestic product, significantly lower than Malaysia’s 53.7 per cent.

And while both countries have fiscal deficits, Malaysia’s is proportionately higher 4.5 per cent of GDP last year compared to that of Thailand 3 per cent. Both countries also hold international reserves equal to more than nine months of retained imports.The reality, however, is that such numbers are not the only factors rating agencies look at when making their assessments. Also considered is the impact of more subjective political variables.

While Malaysia certainly has its problems, the political impasse in Thailand seems far riskier.Thailand’s recent political history, involving military coups, constitutional change and deadly street clashes, cannot be ignored. Malaysia’s political difficulties will be dealt with at the ballot box in a couple of months; Thailand’s could easily be settled at the point of a gun.

via Political impasse hurts Thailand’s credit rating – The Nation.

Banking

The Importance of E-Wallets for Online Gaming Sites

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e-wallet

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Banking

Thai Government to issue Bt50 bln ( $1.57 bln)Savings Bonds to fund COVID-19 Relief Measures

The special savings bonds are available via the “Sasom Bond Mung Kung” e-wallet, abbreviated to “Sor Bor Mor” in Thai on Krungthai Bank’s Pao Tang mobile app, and through four dealer banks. The minimum purchase of these bonds is 1,000 baht, without no maximum. Interest is paid twice a year.

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BANGKOK (NNT) – Thailand’s Public Debt Management Office (PDMO) plans to issue “Ying Aom Ying Dai” (the more you save, the more you earn) government savings bonds, worth 50 billion baht, next month, aiming to use the funds to finance state projects to ease the impacts of the pandemic.

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