Thailand plans to promote the use of RMB to reduce risk against the US dollar | RMB | Thailand
According to Bloomberg News on August 7th, an official from the Bank of Thailand said that Thailand plans to promote the use of the renminbi and other Asian currencies in trade and investment, in order to curb the significant fluctuations in the Thai baht against the US dollar exchange rate.
According to reports, Assistant Governor of the Bank of Thailand, Alisarah Mahasandana, said in a recent interview in Bangkok that the Bank of Thailand expects to use more local currencies to help reduce exchange rate risk, as local currencies are usually synchronized with the Thai baht.
She said that Thailand has been promoting the use of currencies other than the US dollar for over a decade, and this trend is accelerating as the Bank of Thailand has reached a series of bilateral agreements with numerous local central banks and improved financial infrastructure construction.
The report states that the still strong US dollar has devalued other currencies and become a means of exerting economic influence. In this situation, many countries are taking measures to mitigate the risks posed by the US dollar, and Thailand, which relies on trade and tourism, is one of them. The Bank of Thailand has been cooperating with the central banks of China, Malaysia, and Indonesia to provide support for their respective currencies. Alisala said that she will see more progress in this field in the second half of this year.
According to reports, after three consecutive months of decline, the Thai baht rose by 3% in July this year, making it the largest increase among major Asian currencies.
Alisala said, "Since last year, the volatility of the Thai baht against the US dollar has been increasing, so it is very important to increase the means to deal with this situation."
According to reports, China is Thailand's largest trading and investment partner, and the scale of Thai China trade settled in RMB only accounted for 1.2% of Thailand's total trade volume last year, but it has increased compared to approximately 0.3% in 2015. Alisala said that with China's recent relaxation of regulations and companies being more willing to explore alternative options to reduce currency risk, increasing the use of the renminbi has now become feasible.
She said, "The US dollar is the most liquid and widely used currency, so reducing its use is not an easy task. But that doesn't mean we should stop exploring this plan. At least we should provide alternative options to mitigate the rising exchange rate risk."(