The central bank next week will unveil measures for further liberalisation of the foreign-exchange market, facilitating greater outflows to help ease pressure on the baht.”2009 was a challenging year …
Risks persist, though, on fragile global economic recovery,” Bank of Thailand Governor Tarisa Watanagase told a BOT-sponsored conference yesterday.”Capital flows will be more volatile this year. Funds will flow to countries that witness fast recovery. We saw the signals that pressured the baht late last year.
Excessive inflows can lead to asset bubbles if we’re not careful.”Aside from liberalisation, which will also support Thai companies’ relocation of labour-intensive activities elsewhere, currency-hedging tools will be offered to entrepreneurs, in order to ensure reasonable cost.Last year, Thailand welcomed net capital inflows of US$22.6 billion Bt748 billion: $20 billion as trade surplus, $1.5 billion through the bond market and $1.1 billion through the stock market. Inflows boosted foreign reserves, which stood at $134.7 billion as of last November, up from $85.1 billion at the end of 2007.
China’s new three-child policy highlights risks of aging across emerging Asia
Thailand’s (Baa1 stable) total dependency ratio is set to jump nine percentage points to 51% by 2030 – a faster increase than China’s – which will pressure public and private savings through higher taxes and social spending, reducing innovation and productivity gains.
Population aging in China (A1 stable) and other emerging markets in Asia will hurt economic growth, competitiveness and fiscal revenue, unless productivity gains accelerate, according to a new report by Moody’s Investors Service.(more…)
Climate change raises asset risks for banks in Asia-Pacific
Climate change and related government policies raise asset risks for banks in Asia-Pacific, while legal and reputational risks are growing while large, diversified banks in the region are better able to cope with these risks and preserve their credit strength
Climate change and related government policies expose Asia-Pacific banks to physical climate risks, as well as risks that stem from sudden changes in asset values as economic priorities shift, according to Moody’s Investors Service in a new report.(more…)