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INVESTMENT BANKING | Staff Reporter, Thailand

Deutsche Bank arranges Thailand's first onshore hedge for foreign firm

It recently changed rules for non-resident qualified companies, letting them access onshort baht liquidity.

Deutsche Bank Thailand has arranged the country’s first onshore hedge for a foreign corporate under the central bank’s new non-resident qualified company rules.

In a press release, Deutsche Bank said that it arranged the market’s first transaction for a corporate client just three weeks after the Bank of Thailand (BoT) published new rules for non-resident qualified companies (NRQC) on 5 January.

The new rules allow non-resident companies to access the onshore Thai Baht (THB) liquidity without providing underlying documents for each transaction. As a result, foreign corporates can save on hedging costs by accessing the onshore foreign exchange curve because the onshore rates are generally cheaper than offshore hedging rates.

“We expect the new NRQC rules to attract many more non-resident companies to hedge onshore, creating an entirely new market for our THB onshore franchise,” said Teerada Tuppun, Deutsche Bank head of global markets, Thailand.

The NRQC Scheme allows corporates with trade and direct investment in Thailand to access onshore THB liquidity with a greater flexibility, easily switching their hedge from the offshore curve to onshore curve, or vice versa, without making any changes to their current hedge workflow, according to Deutsche.

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