Since China has been an important economic partner of Thailand and the region. To further strengthen these flows of trades and investments, close financial cooperation is the key. The Renminbi / Baht Bilateral Swap Agreement (or BSA in short) and the establishment of the Renminbi Clearing Bank here in Bangkok are the great examples. 6. The BSA is designed to be a backstop liquidity facility, which will help boost confidence of the private sector in using the local currency in trade and investment settlement. After the first signing of the BSA in 2010, the use of the Chinese Renminbi in trade and investment settlement between Thailand and China has grown remarkably. The share of trade settlement in Renminbi quadruples between 2010 and 2014. As for investment  BIS central bankers’ speeches  1  settlement, the share climbs up dramatically from a mere 1% in 2010 to 14% in 2014. In spite of the rapid increases, the volumes are still small compared to other major currencies. 7. The Renminbi Clearing bank is the next important step from the BSA. Its Renminbi settlement mechanism is the sequencing plan of the Renminbi scalability. I could see its merit which fundamentally paves the way for further Renminbi internationalization as well as the role of Renminbi in global financial markets that will become increasingly prominent in the near future. 8. There is, however, some room for improvement in order to realize the full economic benefits between Thailand and China.
This account has been persistently in deficit, although there was a marked improvement in the deficit in 2006 to 6.3% of GDP. In the long run, however, this imbalance needs to be further reduced to a more sustainable level. This can only be achieved to the extent that growth is driven more by export-oriented activities and less by consumption. In view of the large amount of currency in circulation and your interest in ensuring a smooth changeover to the euro, what advice would you give to the public in this regard? As I said earlier, the amount of currency in circulation has been contracting and there is evidence that cash hoards and bank deposits are being converted into euro. We are trying to discourage this premature conversion because portfolio diversification at this stage is expensive and makes little sense. In the case of Maltese lira bank deposits, these will be converted automatically, and at no cost, into euro on the changeover date. As for cash conversions, people who are buying euro currency notes from banks and other financial institutions are having to pay exchange commissions; those who obtain euro notes outside the banking system are being offered an even more unfavourable exchange rate, besides running the risk of receiving counterfeit notes. These early conversions, moreover, constitute a drain on the Bank’s reserves. We are, therefore, encouraging the public to deposit Maltese lira cash holdings into the banking system and retain them in Maltese lira denominated deposits, thereby earning interest.