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Bangkok launching US$1 billion Asian Bond Fund

Bangkok launching US$1 billion Asian Bond Fund

(Thailand) - Thailand is one of several Asian countries about to announce details of a regional fund for investing in dollar-denominated Asian government bonds. In a follow through story to the BOJ's commitment to the initiative, Thai Prime Minister Thaksin Shinawatra and Bank of Thailand Governor Pridiyathorn Devakula have confirmed a decision to contribute US$200 million to the Asian Bond Fund (ABF), starting with an initial, reported US$1 billion.

South Korea, Hong Kong and China are expected to make similar announcements with the extent of participation in the fund but each country would vary.

In a response to substantive capital flight during the 1997-98 Asian economic crisis, the Thai initiated ABF will leverage some of Asia's US$1.3 trillion in foreign reserves.

The Bank for International Settlements will manage the fund and expects to likely start operating later this year with between US$1-5 billion in funding.

The fund is looking to invest in sovereign and semi sovereign debt sold by Government agencies in China, Hong Kong, South Korea, Philippines, Singapore and Thailand.

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