Pattaya Daily News

29 September 2008 :: 12:09:02 pm 41948

Bot Adjusts Bond-Issuing Strategy in Face of Us Financial Crisis

BANGKOK, Sept 29 - To ease the impact of the current financial crisis in the United States on liquidity in Thailand‘s financial system, the central bank, the Bank of Thailand (BoT) has adjusted its bond-issuing strategy by increasing the frequency of issuing and decreasing the value of issued bonds.
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Pongpen Ruenveerayuth, senior director of the central bank’s Financial Market and Reserve Management Division, revealed Sunday that there is no need for heightened concern about a possible liquidity crunch since the BoT is closely monitoring liquidity in the financial system.

She said it is unnecessary to issue a large volume issue of bonds, but that they should rather be offered in response to market demand.

Ms. Pongpen affirmed there is sufficient liquidity in Thailand’s financial market for market demand.

Should there be any shortage, she emphasised, the central bank is ready to inject money into the system.

She conceded that the bank is not now required to seek Finance Ministry approval to issue bonds under the terms of the new legislation, but she stressed the importance of consulting with the Public Debt Management Office to ensure that bonds are issued neither for too great an amount and that they notoverlap and compete with issues by other state agencies.

One source said the change in the bond-issuing method was made with the intention to test the market sentiment and fluctuation since liquidity in the financial market is rather volatile now.

The Bank of Thailand wants to avoid issuing bonds in too large a volume because it was aware such action would make the liquidity in the system drop sharply. (TNA)

Reporter : PDN staff   Photo : Internet   Category : Thailand News

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