Insight & Analysis

Press Release: Deutsche Bank arranges Thailand’s first onshore hedge under new NRQC rules

Published: Feb 2021

29th January 2021 – Deutsche Bank (XETRA: DBKGn.DB / NYSE: DB) Thailand this week arranged the market’s first onshore hedge for a foreign corporate under the Bank of Thailand’s (BOT) new Non-Resident Qualified Company rules.

Newspaper press release

Deutsche Bank acted fast and arranged the market’s first transaction for a corporate client just three weeks after the BOT published new rules for Non-Resident Qualified Companies (NRQC) on January 5, 2021.

The new rules allow non-resident companies to access the onshore Thai Baht (THB) liquidity, without providing underlying documents for each transaction.

Deutsche Bank Head of Global Markets, Thailand, Teerada Tuppun said: “We are pleased to be the first bank in Thailand to arrange the market’s first non-resident onshore THB hedge. The solution provides our corporate clients access to more affordable and flexible THB hedging under the new NRQC rules.

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,” Tuppun added.

With Thai Baht appreciating 10% from its peak in 2020, the cross currency rates and hedging costs became more volatile for foreign companies having THB exposure, at a time when companies are tightly managing costs for the Covid economic recovery.

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.

Qualified non-Thai companies can register for NRQC status through Deutsche Bank AG, Bangkok Branch.

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