Yuan-baht "spread" now allowed across China

BANGKOK, February 6 (TNA) - The Bank of Thailand (BOT) has announced that the "spread" of the Chinese yuan and the Thai baht in the direct foreign exchange trading has already been extended throughout China by the China Foreign Exchange Trade System (CFETS). While announcing the updated situation on February 5, BOT Assistant Governor for Corporate Strategy and Relations Group​Chantavarn Sucharitakul acknowledged that the CFETS's new move will promote more use of the Chinese and the Thai currencies as the medium of exchange in bilateral trade, rather than solely relying on the US dollar as the major medium of exchange in international trade. Besides, the increasingly use of the two local currencies will boost liquidity and reduce foreign exchange costs of traders, meeting the objectives of both the Chinese and the Thai central banks. The BOT assistant governor pointed out that the extension of the direct "spread" throughout China by the CFETS, from only allowed in the southern Yunnan Province bordering Thailand previously, will also provide an additional choice for traders and reduce their risks caused by the more fluctuation of the major currency. According to the BOT assistant governor, BOT has also cooperated with the central banks of Japan, Malaysia and Indonesia, as well as Cambodia, Lao PDR, Myanmar and Vietnam, known as the CLMV group, on the use of local currencies in bilateral trade. "Spread" in the foreign exchange market means the difference between a rate of a currency quoted by a seller, called ASK, and a rate of the same currency quoted by a buyer, called BID, in their direct trade. (TNA)