CURRENCIES
Japan's EU bond purchases will ease baht pressure
- Published: 9 Jan 2013 at 00.00
- Newspaper section: Business
Japan's announcement that it will use its foreign reserves to purchase bonds issued by the EU's financial bailout fund will help to decrease pressure for the baht's appreciation due to an increase of new capital from the Bank of Japan.
Chantavan Sucharitkul, the Bank of Thailand's assistant governor for financial market operations, said the central bank is monitoring discussions between Japan's new government and the Bank of Japan (BoJ) about increasing liquidity in a bid to fulfil a campaign promise of containing inflation at 2%.
The capital inflows from Japan may not be as high as expected if the government pursues its plan of purchasing bonds issued by the European Stability Mechanism (ESM) and euro-denominated bonds.
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