Nod for for­eign­ers is­su­ing bonds in baht


The Fi­nance Min­istry will let for­eign state agen­cies and com­pa­nies ap­ply for baht-de­nom­i­nated bond is­suance as a spe­cial case from Sept 6 to Oct 6, a move ex­pected to help curb the baht’s rapid gain.

For­eign en­ti­ties that win Fi­nance Min­istry approval must is­sue the baht bonds with a ma­tu­rity of up to three years be­tween Nov 1, 2017 and March 31, 2018, the Pub­lic Debt Man­age­ment Of­fice (PDMO) said in a re­lease.

The is­suers will be al­lowed to use the pro­ceeds only in do­mes­tic trans­ac­tions in baht terms and for on­shore spot ex­change.

The min­istry will open ap­pli­ca­tions for for­eign en­ti­ties to of­fer baht-de­nom­i­nated bonds three times a year: in March, July and Novem­ber.

An in­formed source at the Fi­nance Min­istry said the spe­cial pe­riod for baht bond ap­pli­ca­tions is in line with the ini­tia­tives of Fi­nance Min­is­ter Apisak Tan­tivo­ra­wong, since he be­lieves that let­ting for­eign en­ti­ties is­sue baht bonds will help stem the sharp ap­pre­ci­a­tion of the baht, as bond is­suers must con­vert pro­ceeds to US dol­lars.

But the is­suance size de­pends on the Fi­nance Min­istry’s dis­cre­tion, the source said.

The baht is among the top-per­form­ing cur­ren­cies in Asia, up 7.7% year-to-date, ac­cord­ing to Bloomberg data. In com­par­i­son, the Ja­panese yen has surged 7.9%, the Sin­ga­porean dol­lar 7.6% and the Tai­wanese dol­lar 7.4% since the start of the year.

In re­lated news, the PDMO said the Fi­nance Min­istry has ap­proved the is­suance of baht-de­nom­i­nated bonds by the Lao gov­ern­ment and Nam Ngum 2 Power Co.

Both for­eign en­ti­ties are re­quired to is­sue the baht-dom­i­nated bonds or deben­tures in Thai­land by May 31, 2018, and must use all pro­ceeds from the deben­tures ac­cord­ing to the terms and con­di­tions spec­i­fied by the Fi­nance Min­istry.

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