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Thailand to Sign Currency Swap Deal With China
The Thai government has approved in principle a Bank of Thailand (BOT)'s move to sign a currency swap deal with China, the Thai News Agency (TNA) said Wednesday.
Deputy Prime Minister and Finance Minister Somkid Jatusripitak was quoted as saying after a weekly cabinet meeting on Tuesday that the approval would allow the central bank to sign a two billion U.S. dollar currency swap deal with its Chinese counterpart.
The bilateral deal, which is part of an agreement on currency swaps between member countries of the Association of Southeast Asian Nations (ASEAN) and three major East Asian economies, including China, Japan, and South Korea, would be signed soon when everything was ready, he stated.
Under the deal, BOT can borrow, in the U.S. dollar form, from the Chinese central bank up to two billion U.S. dollars. The borrowing, which must be guaranteed by the Thai government, can be made phasically with the required repayment within 90 days each. The borrowing can be extended up to seven times, but the extensions and disbursements must be made within three years after the agreement takes effect.
Thailand signed a similar deal with Japan on July 30, allowing BOT to borrow the maximum of three billion U.S. dollars from the Bank of Japan (BOJ).
The currency swap deals aimed to assist ASEAN member countries facing the liquidity problem, or current account deficits by asking for loans from China, Japan, or South Korea.
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