BOT announced that the publication of the Thai Baht Interest Rate Fixing (THBFIX) interest rate reference will be discontinued after June 30, 2023. BOT made this decision after FCA announced that all LIBOR settings will either cease to be provided by any administrator or no longer be representative immediately after June 30, 2023, in the case of certain USD settings. The preparatory working group of BOT and commercial banks that was established to support the termination of LIBOR has issued guidelines for smooth transition from the THBFIX interest rate reference to the Thai Overnight Repurchase Rate (THOR).
The following are the key highlights of the guidelines for transition from the THBFIX interest rate:
- Financial institutions and businesses must accelerate contract adjustment from the THBFIX interest rate reference to THOR
- Institutions must germinate new transactions based on THBFIX interest rates, including loans, debt instruments, and derivatives, from July 01, 2021 onward.
- BOT will release a fallback rate for the TBFIX interest rate, which will be effective as a replacement for outstanding transactions from July 01, 2021.
Additionally, on March 25, 2021, BOT had issued the first floating-rate BOT bonds based on THOR (six-month term) and received positive response from the market. This positive response marks an important step in promoting the adoption of the THOR reference rate in financial transactions, with the BOT planning to issue such bonds on a monthly basis to strengthen liquidity in the bond market.
Related Links (in Thai)
- Press Release on Discontinuation of TBHFIX Interest Rate
- Press Release on Guidelines on Transition
- Press Release on THOR-Based Bonds
Keywords: Asia Pacific, Thailand, Banking, Securities, Interest Rate Benchmark, THBFIX, THOR, LIBOR, Benchmark Reforms, Derivatives, Bond Issuance, Benchmark Fallbacks, BOT
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