Japanese, Thai central banks sign currency swap arrangement

BANGKOK, May 6 (TNA) -- The Bank of Japan (BoJ) and the Bank of Thailand (BoT) have signed the fourth Bilateral Swap Arrangement (BSA). Chantavarn Sucharitakul, assistant governor for the Bank of Thailand’s Corporate Strategy and Relations Group, said the agreement was signed Friday by Veerathai Santiprabhob, governor of the BOT, and Haruhiko Kuroda, governor of the Bank of Japan. The facility under the arrangement is up to US$3 billion (Bt104 billion). The purpose of the BSA is to enable the two countries to swap their local currencies, either baht or yen, against US dollars in the event that an immediate need arises that would require short-term liquidity support and maintenance of balance of payments of the two countries. This agreement cooperation is based on the Chiang Mai Initiative which is a multilateral currency swap arrangement among the 10 members of the Association of Southeast Asian Nations (ASEAN), China, Japan and South Korea. The foreign exchange reserves pool worth 120 billion US dollars was launched in March 2010 and increased to double in 2012. ASEAN member countries after the 1997 Asian Financial Crisis started this initiative to manage regional short-term liquidity problems and to facilitate the work of other international financial arrangements and organisations. Ms Chantawan said the agreement between BoJ and the BoT will become effective for three years period, started Friday. Thailand’s foreign reserves at this end-March stood at 180.9 billion US dollars while its economy remains strong and there is no need for the time being to draw money from the accord which was just signed. (TNA)