BoT warns investors of baht fluctuation

BANGKOK, 25 December 2010 (NNT) – The Bank of Thailand (BoT) has warned investors of the baht fluctuation given the capital flows after the New Year are unpredictable, adding it is prepared to invest its reserves in Chinese bonds or securities.

BoT Governor Prasarn Trairatvorakul stated that from now on the baht could both depreciate and appreciate as the global capital market was still unstable. He added that investors were sill susceptible to the serious financial problems in Spain and the row between North and South Koreas.

Mr Prasarn also advised the private sector to be watchful of the baht fluctuation, saying it would no longer move in only one direction.

In order to reduce the risk of the fluctuation, the BoT is now negotiating with China over a possibility investing part of the Central Bank’s reserves in Chinese bonds or securities in the form of yuan. Moreover,the Central Bank has been reducing the reserves in the form of US dollar to less than half of the overall reserves, added the Governor.