ID :
389633
Tue, 12/01/2015 - 13:48
Auther :

Thailand to gain on yuan adding to IMF’s benchmark

BANGKOK, December 1 (TNA) - Thailand is expected to gain from trade and investment after the US-based International Monetary Fund (IMF) has added China’s yuan into its benchmark currency basket, effective from October 2016. Bank of Thailand (BOT) Deputy Governor Mathee Supapongse told journalists of the positive prospect on Tuesday, noting that IMF has added the Chinese yuan, also known as renminbi, into its Special Drawing Rights (SDR) basket, along with the US dollar, the euro, the British pound sterling and the Japanese yen. Mathee said that the People's Bank of China has reported the move, which was backed by major countries, including the United States, Britain and Japan, showing that the international community now expects China to play a bigger role in the world economy. Mathee assessed that the IMF's move should not have much negative impacts on the Thai financial market because the IMF's move was in line with most international investors' earlier expectation and they may adjust their investment or hedge gradually in line with the SDR basket. Mathee pointed out that the inclusion of China's yuan into the IMF's SDR basket shows how significance the role of China and its currency are in the international trade and investment currently. On the part of BOT, Mathee acknowledged, the Thai central bank has invested in Chinese bonds since 2010 as part of its risk management for international reserves, while having also encouraged debt settlements in yuan between traders and investors of the two countries. Besides, most recently, BOT has extended the maturity of the Bilateral Swap Arrangement (BSA), valued about 70 billion yuan or about 11 billion US dollars, in an attempt to boost confidence among Thai investors in an easy access to liquidity, if needed. Also, Beijing has appointed the Industrial and Commercial Bank of China (ICBC) (Thai) to perform as its clearing bank in Thailand and to boost the liquidity of the Chinese currency. According to the BOT deputy governor, it is expected that the Chinese yuan should be used more for international debt settlements and investment in the future, after the Chinese government has eased control on its currency. (TNA)

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