Bank of Thailand to relax rules on Chinese yuan use for trade this year

[snoop1130]

Image courtesy of Bangkok Post

 

The Bank of Thailand (BoT) plans to ease regulations on the use of China’s yuan for trade this year, aiming to mitigate the effects of currency volatility, according to BoT Deputy Governor Mathee Supapongse. Ongoing discussions between the central bank and its Chinese counterpart are focused on promoting the usage of the Chinese currency.

 

China is a significant trade partner for Thailand, but transactions in local currencies remain limited. Mathee assured there would not be any issues with the availability of yuan for trade settlements, as both countries have a currency swap arrangement in place.

 

Full Story: https://thethaiger.com/news/business/bank-of-thailand-to-relax-rules-on-chinese-yuan-use-for-trade-this-year

 

-- © Copyright Thaiger 2023-05-11

 

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[Thingamabob]

China's grip on Thailand is getting firmer every day. It can only be hoped that the Thais middle-of-the-road approach to international relations, which has mostly served it well over the years, will be maintained. 

[nigelforbes]

There is nothing new here, it's an extention of the RCEP agreement and the existing currency swaps, all aimed at avoiding USD settlement of export bills.

 

https://www.aseanbriefing.com/news/how-will-the-rcep-impact-thailands-economy/

 

[CartagenaWarlock]

Lots of countries are at least willing to pay partially in Yuan to settle their transactions. Nothing new. 

[Sharp]

BRICS +

[RichardColeman]

Bye bye petro-dollar, welcome to USA super inflation and the real world 

[h90]

Good news, I hope it will reduce our costs of transfer money to China.

[h90]

Just now, RichardColeman said:

Bye bye petro-dollar, welcome to USA super inflation and the real world 

And end of endless wars as they won't be able to finance it anymore

[hotchilli]

The Yuan is getting ready to take over the mighty Dollar.

[John Drake]

Yuan? Reserve currency? Don't think so.

 https://threadreaderapp.com/thread/1655210890470277122.html

[John Drake]

This is what happens when countries don't trade in US dollars.

 

https://finance.yahoo.com/news/russia-says-theres-problem-billions-014447565.html

[BusyB]

21 hours ago, nigelforbes said:

There is nothing new here, it's an extention of the RCEP agreement and the existing currency swaps, all aimed at avoiding USD settlement of export bills.

 

https://www.aseanbriefing.com/news/how-will-the-rcep-impact-thailands-economy/

 

... itself aimed at reducing the effects of potential US sanctions against China in future. China is pursuing this policy hard now. But the volumes involved are still only a few percent. Thailand is not the only country on board.

[dinsdale]

Will this make these cheaper?

[h90]

59 minutes ago, John Drake said:

This is what happens when countries don't trade in US dollars.

 

https://finance.yahoo.com/news/russia-says-theres-problem-billions-014447565.html

yes rupee maybe not such a good idea, but the risk that someone has too many Yuan is not high as China is a big exporter. Or you could trade in gold (not transporting it in real of course, just on paper). Or you could create a new currency like the Euro...than you can print money for 20 years till everyone find out that it is fraud.

[John Drake]

1 minute ago, h90 said:

yes rupee maybe not such a good idea, but the risk that someone has too many Yuan is not high as China is a big exporter. Or you could trade in gold (not transporting it in real of course, just on paper). Or you could create a new currency like the Euro...than you can print money for 20 years till everyone find out that it is fraud.

Will China finance foreign debt denominated in Yuan? That's what they'll need to do. Build up a credit and liquidity pool to rival that of the US. And do it behind a manipulated currency with no transparency.  I just don't see an alternative to the dollar, unless people want to go back to trade and barter.

[h90]

19 minutes ago, John Drake said:

Will China finance foreign debt denominated in Yuan? That's what they'll need to do. Build up a credit and liquidity pool to rival that of the US. And do it behind a manipulated currency with no transparency.  I just don't see an alternative to the dollar, unless people want to go back to trade and barter.

I think there won't be any fast change, just a slow move into multi currency trade.....Sure many countries want to weaken the Dollar.

[nigelforbes]

1 hour ago, BusyB said:

... itself aimed at reducing the effects of potential US sanctions against China in future. China is pursuing this policy hard now. But the volumes involved are still only a few percent. Thailand is not the only country on board.

The volumes are becomming significant, RCEP trade represents over 60% of Thailand's exports, from the link above: "Thailand’s trade with RCEP countries from 2016 to 2019 was worth US$269 billion per year, or about 60 percent of the country’s total trade".

[natway09]

Traded in Euro about 10 years ago with China ( both LL Companys )as the USD at the time just too volatile

Worked well for both parties.

Could never work out why always had to make invoices & transfer in USD when doing business

on the other side of the world & neither party was American.

It will be interesting to see what the "big 5 Thai bank"  bosses response will be

 

[nigelforbes]

1 hour ago, natway09 said:

Traded in Euro about 10 years ago with China ( both LL Companys )as the USD at the time just too volatile

Worked well for both parties.

Could never work out why always had to make invoices & transfer in USD when doing business

on the other side of the world & neither party was American.

It will be interesting to see what the "big 5 Thai bank"  bosses response will be

 

Because USD has long been the common currency that all trade bills are settled in, it's a neutral currency that let both parties accurately define their financial halves of the deal, when two other end currencies were being used (buy/sell). If one party is selling goods priced in shekels and the other party is buying in peso's, converting both to USD normalises the financials to a common denominator.

[jacko45k]

15 hours ago, John Drake said:

This is what happens when countries don't trade in US dollars.

 

https://finance.yahoo.com/news/russia-says-theres-problem-billions-014447565.html

Well behind every raincloud....... perhaps drive the Rupee down and limit tourism......

[BusyB]

21 hours ago, nigelforbes said:

The volumes are becomming significant, RCEP trade represents over 60% of Thailand's exports, from the link above: "Thailand’s trade with RCEP countries from 2016 to 2019 was worth US$269 billion per year, or about 60 percent of the country’s total trade".

That doesn't surprise me, but I was referring to the overall figures - global yuan trade vis a vis dollar trade is about 6% as I understand it, even after all these efforts. So Beijing has a long way to go to ease the grief of potential dollar sanctions. They'd also have to convince a lot more countries as well. Thailand was easy.

Edited May 13, 2023 by BusyB

[metisdead]

A post with a derogatory Australian slang comment toward the USA has been removed.