Sutee Losoponkul, Senior Executive Vice President, Treasury Group, CIMB Thai Bank Plc.

Stocks and Financial Services Press Releases Tuesday March 15, 2016 14:02
Bangkok--15 Mar--CIMB Thai Bank
stated that CIMB Thai is ready to be Appointed Cross Currency Dealers (ACCD) and ready to provide the full services to clients in Thailand from 15 March onwards.
CIMB Thai is among three Thai commercial banks appointed by the Bank of Thailand and the Bank Negara Malaysia to be an ACCD working in partnership with CIMB Bank in Malaysia who is also appointed as an ACCD.

The Local Currency Settlement Framework is the key initiative of the Bank of Thailand and the Bank Negara Malaysia reflecting the close relationship of these two central banks collaborating on the promotion of cross border trades and services.

Sutee said that the relaxed regulations allowing trade and service businesses to use their local currencies will help to reduce the transaction costs as well as the risks associated with the volatility of global settlement currencies.

"Importers and exporters of both countries can save transaction costs by using ringgit or baht directly without any concern over volatility on US dollar exchange rate. Pricing will be also easier with reduced unnecessary transaction cost. Moreover, ringgit-baht exchange rates is more stable compared to US dollar-baht. This factor will attract more transactions in these two currencies. Importers and exporters will gain the full benefits from this regulation relaxation," said Sutee.

CIMB Thai will provide the full services of ringgit-baht settlement and provide ringgit-baht quotation. Clients can select to trade or provide service to their trading counterparts and make or get payment in either ringgit or baht, make deposit or borrowing in ringgit, or make forwards hedging in ringgit as same as using other major currencies. Being in CIMB franchise, the coordination between Malaysia and Thailand to provide cross-border transaction services is fast and effective. In addition, CIMB is the fifth largest bank in ASEAN having 298 branches across Malaysia.

It is expected that transactions under the Local Currency Settlement Framework will continuously increase to USD 22 billion per year.

Nevertheless, the volume of trade and service transactions in ringgit has been very small comparing to the trade in US dollar due to the ringgit's restrictions. The relaxation of both central banks' regulations will ease the transaction process to become more convenient like other currencies which will boost the trade and service volume of both local currencies.

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