Thai central bank tells investors of yuan's potential in world trade
By Erich Parpart ,The Nation/Asia News Network
July 20, 2014, 12:00 am TWN
The Bank of Thailand is encouraging Thai investors to gain a greater understanding on the use of Chinese yuan as a means for trade and investment. The move comes on the back of the yuan's apparent increase in importance in world trade and its potential to become an international currency.
Chantavarn Sucharitakul, BOT assistant governor for the Financial Markets Operations Group, said at the central bank's seminar yesterday that Beijing was rapidly reducing regulations regarding the use of its currency to promote the use of the renminbi in transactions in the region.
She said the BOT believed that the use of the yuan would provide more options in term of payments when doing business with China.
“Presently the use of Chinese yuan in Thailand is not widespread since only 1 percent of the total 14 percent of Thailand's trade activities with China is traded by using RMB (renminbi — another name of the yuan),” she said.
“However, this rate is increasing fast, and therefore Thai investors should learn how to use the currency as a means for trade and investment in order to provide them with additional trading channel because the yuan's importance and popularity will increase in the future even though it is not widely accepted and fully liberated at the moment,” she said.
Chantavarn said that an example of China's policy to remove some of the regulations on the yuan was to relax its flow by allowing it to move within a range of plus and minus 1 percent to plus and minus 2 percent.
She said that this meant there was more room for trade and investment via the yuan.
Maytee Phanachet, capital markets product management head at Kasikornbank, said that internationally the pace of the yuan's internationalization had been gradual but consistent.
And since its launch in 2009 (before this the yuan had almost no exposure in international markets), he said more and more businesses had been allowed to use the yuan in the foreign exchange market and the market's infrastructure had been developed.
This resulted in the yuan's daily turnover in the foreign exchange market going from virtually zero in 2009 to 720 yuan in 2013.