BANGKOK, 16th July 2013 The Bank of Thailand (BOT) and the Bank of Hong Kong have joined hands developing a cross-border payment link between the Bahtnet and Hong Kong’s US dollar Chats. The system will facilitate high-value funds transfers and eliminate settlement risks.
According to Krerk Vanikkul , the manager of Financial Institutions Development Fund or FIDF, the new development will connect Thailand’s Bahtnet system and Hong Kong’s US dollar RTGS (real-time gross settlement) system via the PVP (Payment versus payment) mechanism. The new system is expected to be in operation in July next year.
The system will benefit monetary institutions as it will increase the efficiency and safety of the foreign exchange settlement between US dollar in Hong Kong and Thai baht in Thailand, allowing trading parties to receive foreign currencies simultaneously. It will also strengthen the Thai monetary system, said the FIDF manager.
Moreover, US dollar and Thai baht transactions now account for 85% of all currency transactions. In the year 2012, baht and dollar transactions reached an average of 170 billion baht per day, roughly about 40 trillion baht per year. The Bank of Thailand also aims to build up the country’s readiness in preparation for the upcoming ASEAN Community of 2015 in terms of economic expansion.
