Foreigners favour longer-term bonds, says central bank
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Foreign investors have focused their Thai investments on debt instruments with maturity of more than one year, holding bonds with an average four-year maturity, according to the Bank of Thailand.
Prasarn Trairatvorakul, BOT governor, said foreign capital moving into the nation was mostly invested in fixed-income instruments with maturity longer than a year, adding that the four-year average maturity indicated that the investments were likely for pension funds.
The central bank has requested that financial institutions compile a list of foreign investors so that it can monitor foreign-capital movements, Prasarn said, adding that the move demonstrated the central bank’s close and consistent monitoring of the money market. The request is one of several measures the bank has introduced relating to capital movements.
The other measures are to let the baht move in line with the market mechanism; to promote more Thai investment overseas in order to balance currency flows; intervention in the market; and supervision of the exchange rate from minimal to strict levels.
The baht moved in a range of 29.02-29.07 per US dollar yesterday morning after moving in a range of 29.03-29.05 on Thursday.
A treasurer at a commercial bank said the baht had stabilised with light trading volume in the past two days ahead of the long Songkran holiday.
Bangkok Bank’s executive board chairman, Kosit Panpiemras, believes the baht’s appreciation will not last beyond the short term, and that the currency could fall back to 30 to the US dollar. There are many factors involved and investors could change their position at any time, he said. It is the role of the BOT and the Finance Ministry jointly to oversee the situation and seek appropriate measures to deal with it.
