Currency and Interest Rate Outlook slide image

Currency and Interest Rate Outlook

K KASIKORNTHAI ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Thailand's external balances remain relatively strong compared to peers High international reserve / Imports (Import Coverage) Low foreign holding ratio in Thai government bonds Months of Imports 1208642 3070 26.0% 25% 22.9% 12.3 12.1 10.8 11.1 20% 9.5 9.0 8.7 14.6% 15% 10% 3 months5% 0% lil. 14.0% Indonesia South Korea Malaysia 2.3% Philippines Thailand India Indonesia Philippines Korea Malaysia Thailand Singapore Source: CEIC, KResearch (data as of March 2021) High international reserve ratio / External debts 140% 120% 94% 96% 126% 100% 100% 77% 80% 60% 41% 40% 31% 23% 20% 0% India Indonesia Philippines Korea Malaysia Thailand Singapore Note: Retrieved from Asia Bond Online, based on latest available datal Source: Asian Development Bank 0.8% Vietnam ■Thailand's economy and financial markets are able to withstand impacts from fluctuations in global liquidity due to: ■High import coverage (international reserves/monthly imports) compared with the IMF's three month import coverage guideline ■More than 100% of external debt covered by international reserves ■Low portion of foreign holdings in Thai government bonds compared with other countries Source: CEIC, KResearch (data as of March 2021), Retrieved on July 2021 บริการทุกระดับประทับใจ K KASIKORNTHAI ธนาคารกสิกรไทย 开泰银行 KASIKORNBANK Monetary and fiscal expansion raises financial stability concerns In consistent with the Fed, the BOT cut interest rate to support the economy amid COVID-19 outbreak Thailand has enough FX reserves to meet all internal and external obligations Percent 3.0 2.5 20 2.0 1.5 Federal Funds Target Rate - Upper Bound Federal Funds Target Rate - Lower Bound BOT Policy Rate 1.0 0.5 0.0 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 161 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 1871 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 חו קח ■Due to a deteriorating economy, the Fed decided to cut its policy rate by 1.50% in 2020 to 0.00-0.25% ■Monetary easing leads to a massive exodus of capital from emerging markets and worsens exchange rate depreciation. However, Thailand's external stability will likely be maintained ■The Thai banking system excess liquidity fell slightly. The CAR was good (20.1% as of 4Q20) and NPL ratio was still manageable (3.1% as of 4Q20), with net profits of Bt146.2bn in 2020 3 months of imports $ Billion 300 $ Billion ■FX Reserves 300 Reserves backing banknotes ■ST external debt ■Net Forward Position 250 250 200 200 280.2 56.3 150 150 $312.9 Billion $193.41 Billion 100 100 65.0 50 50 72.2 32.7 0 0 Source: BOT, KResearch. Last Update: July 22, 2021 Excess liquid assets in Thai commercial banks slightly rose Million Baht 5,000,000 %LCR 194 200 183 185 185 190 4,000,000 177 178 174 180 3,000,000 170 2,000,000 160 2016 2017 2018 2019 2020 Liquid Assets. 1Q21 May-21 LCR (%) Note: BOT has imposed the Liquidity Coverage Ratio (LCR) Framework which replaces the maintenance 6% reserve requirement. Regarding the LCR framework, all banks shall maintain high-quality liquid assets not less than net expected cash outflow over the next 30 days. The LCR was implemented on January 1, 2016, with the minimum requirement set at 60%, rising in equal annual steps of 10 percentage points to reach 100% on January 1, 2020 บริการทุกระดับประทับใจ 158 157
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