Billion-dollar Asian bond fund launched in Bangkok<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Thai Prime Minister Thaksin Shinawatra on Monday launched a
\nbillion-dollar Asian Bond Fund (ABF), backed by 11 Asian
\neconomies, which will focus on investing in regional government
\nbonds.<\/p>\n
Thailand, Indonesia, Malaysia, Singapore, the Philippines,
\nChina, Hong Kong, South Korea, Japan, Australia and New Zealand
\nare the participating economies.<\/p>\n
\"Developed countries know how to use instruments to (create)
\ncapital but countries in Asia, the majority still don't have
\nenough access to that kind of instrument yet. This is the first
\nstep,\" Shinawatra told reporters at a news conference in Bangkok
\nas quoted by AFP.<\/p>\n
The bond fund is the brainchild of the Thai premier, who said
\nhe wanted to promote regional financial stability and minimize
\nthe risk of a repetition of the 1997-98 Asian economic crisis.<\/p>\n
Thailand initially committed US$200 million to the fund.
\nHowever, Thaksin said other countries had contributed more than
\nexpected, so it reduced its contribution to $120 million.<\/p>\n
A separate statement from the 11-member Executives' Meeting of
\nEast Asia and Pacific Central Banks Group (EMEAP), which is
\noverseeing the setting up of the fund, said the fund would invest
\nin a basket of U.S.-dollar denominated bonds issued by sovereign
\nand quasi-sovereign Asian issuers in the economies of the
\nparticipating countries other than Japan, Australia and New
\nZealand.<\/p>\n
The fund is to be managed by the Bank for International
\nSettlements, Thaksin said.<\/p>\n
In Jakarta, Bank Indonesia also held a press conference in
\nrelation to the launching of the fund.<\/p>\n
BI deputy governor Taslim Tadjudin said Indonesia has
\ncommitted $50 million to the fund. The contribution was taken
\nfrom the country's foreign exchange reserves which currently
\nstand at more than $33 billion.<\/p>\n
\"Asian bonds have higher yields than traditional bonds issued
\nby developed countries. Additionally, having an external fund
\nmanager to manage our investments will yield better results,\"
\nTaslim said.<\/p>\n
Taslim was confident Indonesia would get higher yields than it
\ndoes in its current investments in U.S. Treasury bonds.<\/p>\n
According to a BI press release, central banks and monetary
\nauthorities in the Asia Pacific region manage 56 percent or $1.2
\ntrillion of the total world foreign exchange reserves. Most are
\ninvested in U.S. money markets or other G-7 countries.<\/p>\n
While saying it is the government's decision when to issue
\nsovereign bonds, Taslim said the Asian Bond Fund will provide a
\ndegree of certainty when the government decides to do so.<\/p>\n
\"The possibility of issuing sovereign bonds is still very much
\nopen. But it is up to the government, BI is only the facilitator.
\nBut at least, when they (sovereign bonds) are issued, we know
\nthere will be buyers,\" Taslim said.<\/p>\n
The Ministry of Finance had planned to issue sovereign bonds
\nnext year for the first time since the 1997 crisis, to help
\nfinance the state budget.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/billion-dollar-asian-bond-fund-launched-in-bangkok-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}