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BOT: baht bond will not much affect financial market
The Bank of Thailand (BOT) said foreign financial institutions' issuance of baht bond must not have adversely impact on liquidity and yield curve in bond market.
Amara Sriphayak, the BOT's senior director, said if approved financial institutions spend money financed from the bonds domestically, the issuance would not cause 'crowding out effect', the situation that liquidity dries out from one's investment or financing, because the liquidity remains unchanged.
However, the bond issuance could pull up yield curve in bond market as the foreign institutions would try to introduce attractive bonds.
"The central bank would approve total amount of annual issuance and would consider overall impacts on macro-economy," she said.
Ten foreign financial institutions, such as World Bank, Asian Development Bank and Nordic Investment Bank, express their interests to issue baht bonds worth Bt50billion.
The Nation
Anoma Srisukkasem
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