Efforts by the European Central Bank to boost inflation and pursue a weaker currency will not affect Thailand's euro allocations, according to the Bank of Thailand, while other currencies besides the baht will remain attractive for investors in the curren
Chantavarn Sucharitakul, the BOT’s assistant governor for the Financial Markets Operations Group, said the Thai central bank had a long-term view on investment and since European capital markets were one of the deeper and more liquid markets, they would continue to meet the criteria of the BOT’s reserves allocations.
“The decision on portfolio allocation weight will be based on a number of forward-looking assessments of structural economic issues that will have an implication on the longer-term outlook as well as cyclical changes in valuations with respect to other currencies,” she said. “And ultimately, the euro remains a dominant reserve currency undergoing domestic rebalancing.”
Meanwhile, Chantavarn said the sentiment in the currency market towards currencies such as the South Korean won, Australian dollar and Chinese yuan (RMB) remained the same given the current environment.
“Currencies such as KRW, AUD and RMB already feature in the portfolio of many reserves managers in this region because they are attractive for their diversification benefits and return generation,” she said.