To encourage more businesses to use the yen and other Asian currencies, Japan’s Finance Ministry announced a comprehensive plan Monday to launch direct currency trading with other regional players.
The biggest issue is ensuring liquidity in the market so that those who want to buy the baht can quickly find a seller, and vice versa. The longer it takes, the more risk traders face of losing money from a change in exchange rates. There is a greater risk to holding less liquid currencies, which would lead to higher fees.
The ministry will first enter talks with Thailand. Some 48% of bilateral trade is settled in the yen or baht, compared with 51% in the U.S. dollar. Japan sees significant demand for direct yen-to-baht exchanges.
The Finance Ministry also will consider issuing Asian-currency bonds in Tokyo, among other measures, in an effort to boost their liquidity. Japan will urge Thailand to raise the amount of baht nonresidents can possess, which is currently capped at 300 million baht ($8.8 million).
The ministry will also call on the Japanese Bankers Association to extend its yen-clearing system, now only available at home, to Japanese bank operations in Asia. This could speed up yen-denominated transfers.
Corporate debt market in Thailand well positioned for further growth
Brazil, China, South Africa and Thailand are best-placed for corporate debt market growth says Moody’s Investors Service in a report that analyzed trends in 35 emerging markets.
Corporate debt markets in Brazil (Ba2 stable), China (A1 stable), South Africa (Baa3 negative) and Thailand (Baa1 positive) are best-placed to achieve further growth in the coming years, Moody’s Investors Service said today in a report that analyzed trends in 35 emerging markets.(more…)
BOT relaxes rules to Curb Strong Baht
the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht.
The Thai baht has been under pressure due to imbalanced capital flows in the current environment of highly uncertain and volatile external conditions, the Ministry of Finance (MOF) and the Bank of Thailand (BOT) decided to relax regulations to facilitate capital outflows to help promote capital flow balance and lessen pressure on the baht.(more…)
Bank of Thailand cuts rate by 0.25% to 1.25 per cent
The latest cut brings the Bot’s policy rate to an historical low, which the bank maintained from April 2009 to July 2010 during the subprime global financial crisis.
On 6 November 2019, the MPC voted 5 to 2 to reduce the policy rate by 0.25 percentage point from 1.50 to 1.25 percent, effective immediately. Two members voted to maintain the policy rate at 1.50 percent.(more…)
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