Baht-yuan exchange pact signed with China

[webfact]

Baht-yuan exchange pact signed with China
The Nation


Prime Minister Prayut Chan-o-cha and his Chinese counterpart Li Keqiang review a guard of honour during a welcome ceremony at the Great Hall of the People in Beijing yesterday. Prayut is in China on an official two-day visit.

Stock market cooperation and other agreements also signed during Prayut's visit to Beijing

BANGKOK: -- Thailand and China marked Prime Minister General Prayut Chan-o-cha's official visit to the economic powerhouse by yesterday signing memoranda of understanding and agreements on currency exchange and stock-market cooperation.

The aim is to secure the flow of the yuan and ease access to the currency and capital transactions in the region.

Prayut witnessed the signing of the four MoUs and pacts with Chinese Premier Li Keqiang after their meeting in Beijing, according to Thailand's Government House.

The People's Bank of China and the Bank of Thailand signed a yuan-baht bilateral swap agreement (BSA) and an MoU to establish yuan clearing arrangements in Thailand.

The BSA is an extension of an agreement signed three years ago.

Under this swap arrangement, 70 billion yuan (Bt370 billion) will be made available for three years, the BOT said.

The swap transactions between the BOT and the PBC would provide access for both central banks to the local currency of the other party, Government House said.

This would bolster confidence in the private sector and financial institutions in relation to the availability of local currency for cross-border trade and investment settlements, it said.

Lower costs, greater efficiency

The BOT said the establishment of the yuan clearing arrangements would facilitate access to China's onshore foreign-exchange market. This would lower the cost and enhance efficiency for Thai commercial banks when conducting transactions between the two countries, it said.

The PBC will appoint eligible Chinese commercial banks operating in Thailand as yuan clearing banks in order to conduct yuan settlements in this country.

Beijing has similar currency arrangements in Hong Kong, which is part of China but has its own currency, and other countries in the region so as to allow easy access to the yuan for traders and investors, according a BOT official.

Beijing recently proposed implementing an Asian currency-stability system in a bid to ensure that the yuan would have more roles and could become a stable convertible currency in the region.

Chinese leaders proposed during a meeting with Asean members in August that countries in East Asia lessen their dependency on Western currencies, notably the US dollar.

Thailand's previous elected government began to show interest in currency cooperation with China in order to have alternative currency arrangements for the flow of money and capital in the region, as Chinese trade and investment are increasing and Western currencies are fluctuating.

Prayut's two-day visit to China ends today. Premier Li left Bangkok at the end of the fifth Greater Mekong Subregion summit on Saturday.

The two countries on Friday signed two pacts for Thailand's US$10.6-billion (Bt348-billion) railway development and purchases of Thai farm products, notably rice and rubber.

Prayut's visit aimed to forge mutual relations and a deeper relationship with China's leaders, as well as express Thailand's intent to strengthen its comprehensive strategic cooperative partnership with China, the Thai government said in the statement.

Joint visions on the next phase of the Thailand-China cooperation will also be determined, particularly those related to regional economic connectivity for mutual benefits, it said.

The details of the MoUs were not revealed.

Source: http://www.nationmultimedia.com/business/Baht-yuan-exchange-pact-signed-with-China-30250451.html


-- The Nation 2014-12-23

[IsaanUSA]

I know it's easy to go to China for help, but why not try to strengthen the core ASEAN?

[BigBadGeordie]

Repent at leasure Thailand, repent at leasure.

[davehowden]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

[Commerce]

I often wondered how long it would be before China starts buying countries at will.

[smutcakes]

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

[MaxLee]

"Lower costs, greater efficiency"

Or in other words "made in China" FACE safety and satisfaction guaranteed...

[tonbridgebrit]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

Ha ! I've only just noticed. Some of the soldiers have got their knees exposed, they're actually women wearing skirts !!

[car720]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

A man of good taste.

Did you see that big military parade, not long after the olympics?

Enough to make me want to re.

[car720]

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

The really laughable part is that the Thais think they can con the Chinese the same way they do the falang.

[shirtless]

Thailand needs to be reminded what Chins gives she takes 10 times .

[thailand49]

China is the devil in sheep clothing? I hope Thailand knows what they are doing? playing the U.S. for military aid at the same time. But I guess they are not the only one. Seems like manipulation of the stock market and exchange rate?

[chainarong]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I often wondered how long it would be before China starts buying countries at will.

The same was tried in Africa, Papua New Guinea and it back fired

[OneZero]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

A man of good taste.

Did you see that big military parade, not long after the olympics?

Enough to make me want to re.

https://www.youtube.com/embed/1vA4T1wfJLE?rel=0

Let's all re-enlist.

[chainarong]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

The really laughable part is that the Thais think they can con the Chinese the same way they do the falang.

I don't think the Falang is being taken for a ride , every Falang knows what it's all about, it is when the rosters come home to rest that's when Thailand will discover who was &lt;deleted&gt; who.

[Ricardo]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

Ha ! I've only just noticed. Some of the soldiers have got their knees exposed, they're actually women wearing skirts !!

It's only a skirt, if they're also wearing underpants, otherwise they might really be wearing kilts !

And a Merry Christmas to all posters from Kent !

[Ricardo]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

A man of good taste.

Did you see that big military parade, not long after the olympics?

Enough to make me want to re.

https://www.youtube.com/embed/1vA4T1wfJLE?rel=0

Let's all re-enlist.

Or perhaps one of these songs too ?

from Pattaya's own Barry Upton

from Little Mix

[webfact]

Thailand, China agree to Bt370 bln currency swap
By Digital Content



BEIJING, Dec 23 -- The central banks of Thailand and China have agreed to renew their bilateral currency swap deal worth 70 billion Chinese Yuan or Bt370 billion.

The agreement was signed in Beijing on Monday by Prasarn Trairatvorakul, governor of the Bank of Thailand (BoT), and Hu Xiaolian, deputy governor of the People’s Bank of China (PBC).

The signing took place during the official visit to China by Thai Prime Minister Gen Prayut Chan-o-cha yesterday and today.

Mr Prasarn said the new swap agreement will replace the old deal which expired on yesterday. He said it will be effective for three years.

The arrangement provides each central bank access to local currency of the other contracted party.

It will boost confidence of the business and financial sectors of the two countries in using both the currencies in trade and investment settlements, he said.

Also, the Thai and Chinese banks signed an agreement to appoint a yuan clearing bank in Thailand.

Mr Prasarn said the yuan clearing bank will help cut cost of Thai commercial banks for settlement services in yuan and improve the efficiency of international trade between the two countries.

The BoT governor said China's PBC will consider and appoint a commercial bank in Thailand as the yuan clearing bank. (MCOT online news)


-- TNA 2014-12-23

[gabruce]

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

I would note that the yuan/thb agreement is part of a larger pattern of moving away from settling accounts via the US Dollar and doing direct currency exchanges. This means that there will be slightly less demand for the US dollar for conducting business between Thailand and China (buying and selling) as transactions can be settled directly. China is busy setting up similar agreements all around the world, as is Russia. This should result in lower transaction costs as the US clearing house won't be collecting it's percentage or be in a position to stop or delay the transaction if the US decides that it's politically desirable. FYI. This is just my understanding and I am far from an expert.

[brfsa2]

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

I would note that the yuan/thb agreement is part of a larger pattern of moving away from settling accounts via the US Dollar and doing direct currency exchanges. This means that there will be slightly less demand for the US dollar for conducting business between Thailand and China (buying and selling) as transactions can be settled directly. China is busy setting up similar agreements all around the world, as is Russia. This should result in lower transaction costs as the US clearing house won't be collecting it's percentage or be in a position to stop or delay the transaction if the US decides that it's politically desirable. FYI. This is just my understanding and I am far from an expert.

You nailed it.

This is an excellent move by Thailand. Less dependency on the USD is the way to go. Specially now that China is the #1 world economy. http://www.forbes.com/sites/timworstall/2014/12/07/chinas-now-the-world-number-one-economy-and-it-doesnt-matter-a-darn/

Other countries are following suit.

[BSJ]

This is a big middle finger to the USA for snubbing Thailand after the coup-d'etat.

After the meeting the PM was seen doing the happy dance with his NBF!

[yankee99]

Do they think Chinese factories are going to want business in baht? No they want dollars!!

[NeverSure]

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

I would note that the yuan/thb agreement is part of a larger pattern of moving away from settling accounts via the US Dollar and doing direct currency exchanges. This means that there will be slightly less demand for the US dollar for conducting business between Thailand and China (buying and selling) as transactions can be settled directly. China is busy setting up similar agreements all around the world, as is Russia. This should result in lower transaction costs as the US clearing house won't be collecting it's percentage or be in a position to stop or delay the transaction if the US decides that it's politically desirable. FYI. This is just my understanding and I am far from an expert.

You nailed it.

This is an excellent move by Thailand. Less dependency on the USD is the way to go. Specially now that China is the #1 world economy. http://www.forbes.com/sites/timworstall/2014/12/07/chinas-now-the-world-number-one-economy-and-it-doesnt-matter-a-darn/

Other countries are following suit.

From your link.

"For what determines how well people live (and yes, aiding people in living well is pretty much the point of this whole having an economy thing) is economic output per capita. That total economy divided by the number of people who get to consume the output.

Here the US is well ahead (north of $50,000 a year in the US, only just over $5,000 a year in China and yes, that is after adjusting for price differences) and China would need another three generations of breakneck growth to close that gap."

[VegasVic]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

I would note that the yuan/thb agreement is part of a larger pattern of moving away from settling accounts via the US Dollar and doing direct currency exchanges. This means that there will be slightly less demand for the US dollar for conducting business between Thailand and China (buying and selling) as transactions can be settled directly. China is busy setting up similar agreements all around the world, as is Russia. This should result in lower transaction costs as the US clearing house won't be collecting it's percentage or be in a position to stop or delay the transaction if the US decides that it's politically desirable. FYI. This is just my understanding and I am far from an expert.

"as is Russia" ? I think you mean "as was Russia", there is nobody and no country that wants anything to do with the Ruble right now or anytime in the near future As far as the memorandum of understanding goes, it smacks of the beginning of a relationship between a loan shark and a needy gambler, I certainly hope for Thailands sake that when a proper government is elected and a new Prime minister installed that they can exit this agreement if need be. Remember the old saying "beware of Greeks (Chinese) bearing gifts

[VegasVic]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I dont really understand the implications of this particular agreement, but what i want to know is why the sudden rush to sign as many agreements with China in such a short a time as possible.

Agreements signed on Saturday in Bangkok, then over to China and sign four more on Monday. I sincerely hope that these agreements and the deals between the countries are being studied and thought out carefully. It all seems very rushed.

Perhaps the Chinese have come bearing gifts to big to turn down.

I would note that the yuan/thb agreement is part of a larger pattern of moving away from settling accounts via the US Dollar and doing direct currency exchanges. This means that there will be slightly less demand for the US dollar for conducting business between Thailand and China (buying and selling) as transactions can be settled directly. China is busy setting up similar agreements all around the world, as is Russia. This should result in lower transaction costs as the US clearing house won't be collecting it's percentage or be in a position to stop or delay the transaction if the US decides that it's politically desirable. FYI. This is just my understanding and I am far from an expert.

You nailed it.

This is an excellent move by Thailand. Less dependency on the USD is the way to go. Specially now that China is the #1 world economy. http://www.forbes.com/sites/timworstall/2014/12/07/chinas-now-the-world-number-one-economy-and-it-doesnt-matter-a-darn/

Other countries are following suit.

Be careful what you wish for Sherlock for you may very well get it

[Bocking]

I don’t pretend to fully understand it, but it’s all part of a growing trend where Nations are slowly but surely divorcing themselves from a dependency on the US Dollar. With the US Dollar as the world’s reserve currency there was always a guaranteed market for US Treasury Bonds. Thus, even with QE, these Bonds maintained value. But, as Nations and Pacts (BRICS etc) begin entering into bilateral arrangements for trading in their local currencies, that dependency on the US Dollar, and demand for its Bonds, is reduced.

In the twelve months between January and December 2014, the Russian Ruble lost 50% of its value against the US Dollar. It would be interesting to see at what point, if any, Russia off-loaded some of its US Dollar stockpile into the market.

[SinCityGr8One]

My doesn't he look "the business".

Reminds me of Mussolini in Berlin.

Some of those guards of honour look tasty though.

A man of good taste.

Did you see that big military parade, not long after the olympics?

Enough to make me want to re.

https://www.youtube.com/embed/1vA4T1wfJLE?rel=0

Let's all re-enlist.

I watched the entire 60th Anniversary of the P.R.C. on CCTV. From opening ceremonies to the PLA Air force fly over with their their various Military Aircraft at the closing ceremonies. But, the BEST part was watching the various Female Military units marching in the Parade. Definitely quite alot of "Hotties" dressed their Military best strutting their stuff.

[VegasVic]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

This is a big middle finger to the USA for snubbing Thailand after the coup-d'etat.

After the meeting the PM was seen doing the happy dance with his NBF!

Happy.JPG

Given the amount of money involved I doubt it even registers on the U.S. economic radar, and China has their own problems with the real estate bubble bursting and the fallout from the collapse, like exposing the Chinese shadow banking system, I don't think that a self appointed military dictator should be engaging these type of agreements, but then again the way they keep postponing elections the military could be in control in Thailand for a verrrry long time

[mania]

From your link.

"For what determines how well people live (and yes, aiding people in living well is pretty much the point of this whole having an economy thing) is economic output per capita. That total economy divided by the number of people who get to consume the output.

Here the US is well ahead (north of $50,000 a year in the US, only just over $5,000 a year in China and yes, that is after adjusting for price differences) and China would need another three generations of breakneck growth to close that gap."

Yes but again using GDP as any indicator is not useful as it includes

Government Spending what they do not have. Especially so in the case of the USA

"If a country becomes increasingly in debt, and spends large amounts of income servicing this debt this is not reflected in a decreased GDP."

Edited December 23, 2014 by mania

[VegasVic]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I don’t pretend to fully understand it, but it’s all part of a growing trend where Nations are slowly but surely divorcing themselves from a dependency on the US Dollar. With the US Dollar as the world’s reserve currency there was always a guaranteed market for US Treasury Bonds. Thus, even with QE, these Bonds maintained value. But, as Nations and Pacts (BRICS etc) begin entering into bilateral arrangements for trading in their local currencies, that dependency on the US Dollar, and demand for its Bonds, is reduced.

In the twelve months between January and December 2014, the Russian Ruble lost 50% of its value against the US Dollar. It would be interesting to see at what point, if any, Russia off-loaded some of its US Dollar stockpile into the market.

It would be even more interesting to see just how those countries that took the Ruble instead of demanding Dollars, feel about that decision right about now - OUCH Deflation is a very real scenario in many countries around the world right now, with that said I think that I will keep my investments denominated in U.S. Dollars