Thailand’s government bond yields fell for most tenors between end-June and end-September, and dropped further for all tenors in October. Yields for tenors ranging from 2- to 10-years decreased between end-June and end-September, with the largest drop of 25 basis points (bps) for the 6-year tenor. In October the decline in yields was relatively large from the belly to the longer-end of the curve, with the 5-year tenor registering the largest decline at 45 bps.

The local currency (LCY) bond market in Thailand had a total outstanding size of THB7.1 trillion (US$229 billion) at end-September, up 8.7% y-o-y and 4.8% from end-June. The y-o-y growth rate at end-September was also higher than the 6.2% y-o-y growth rate registered at end-June. Total government bonds outstanding at end-September climbed 8.9% y-o-y and 6.5% from end-June to reach THB5.8 trillion. LCY corporate bonds outstanding reached THB1.3 trillion at end-September, growing 8.1% y-o-y but falling 2.0% from end-June.   

In October the Bank of Thailand (BOT) announced its collaboration with the Bank of Japan to set up a Thai baht lending facility, with Japanese government securities serving as collateral, in order to aid companies affected by the recent flooding. In August the BOT and 11 commercial banks signed a memorandum of understanding for the commercial banks to sell 3- and 7-year BOT savings bonds worth THB50 billion between 26 August and 6 September.