This action aims to support the use of local currencies in cross-border commerce while assisting Thai exporters and importers to lessen the effects of currency volatility.
This year, the Bank of Thailand (BoT) will loosen the restrictions on the use of the Chinese yuan in commercial transactions. This action aims to support the use of local currencies in cross-border commerce while assisting Thai exporters and importers to lessen the effects of currency volatility.
According to BoT deputy governor Mathee Supapongse, the BoT and the People’s Bank of China (PBoC) are in discussions about how to make using the yuan for trade settlements easier and more appealing. Although China will make up around 12% of Thailand’s overall trade value in 2022, he claimed that local currency payments to China are still insignificant, at about 2%.According to Mathee, there won’t be any issues getting enough yuan for commerce because both nations have a swap line arrangement that lets them to exchange up to 70 billion yuan, or 370 billion baht, at a time. He said that the US shouldn’t view the usage of the yuan as a danger because, for the foreseeable future, the Chinese currency won’t be able to usurp the US dollar’s position as the world’s reserve currency.
To assist enterprises in hedging against currency rate risks and lowering transaction costs, the BoT has been pushing the use of local currencies for commerce with its neighboring nations, including Malaysia, Indonesia, Cambodia, Laos, Myanmar, and Vietnam. The BoT anticipates that the loosening of yuan usage regulations will strengthen Thailand-China business relations.
