The Thai capital market is bracing for an exodus of foreign investors as the US Federal Reserve (Fed) will soon tighten its unprecedented monetary easing stance, said Bank of Thailand governor Prasarn Trairatvorakul.
"Only part of the funds has been pulled out of the bond market. The country's foreign reserves, however, can cushion risks even if all funds are moved out as foreigners' holdings in Thai bonds is far smaller than foreign reserves at around US$200 billion," he said.
Foreigners' holding in Thai bonds amount to 800 billion baht, representing 12% of the overall bond market. Local bonds with 4- to 5-year maturity are the most popular type among offshore investors.
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