Bangkok Post Saturday 25 December 2004 - Regional bond market may rise in response to lower US dollar
Regional bond market may rise in response to lower US dollar
WICHIT CHANTANUSORNSIRI
Efforts to develop the regional bond market may get a boost from the falling US dollar, according to Olarn Chaipravat, an adviser to Finance Minister Somkid Jatusripitak.
He said that the US government, faced with a growing current account deficit, was allowing the dollar to weaken in value to help address its trade imbalance.
''No one wants to hold a security that is weakening in value. Everyone wants to invest in something that is appreciating,'' Dr Olarn said at a seminar on the Asian bond market at the Fiscal Policy Office yesterday.
Fears of further declines in the dollar are prompting concerns among Asian central banks that have accumulated holdings of hundreds of billions of dollars worth of dollar-denominated assets as part of their reserves.
Authorities hope that by strengthening the Asian bond markets, investors and central banks will have an alternative investment vehicle to diversify their portfolios.
Regional central banks earlier this month announced the launch of the $2 billion Asian Bond Fund 2 to invest in government and quasi-sovereign debt instruments issued within the region.
Thirachai Phuvanat-naranubala, the secretary-general of the Securities%2
