Bangkok, Thailand-Japan extend BSA agreement, new version to be signed in July to support emergency loans, promote financial cooperation between the two countries. Mrs. Ratklao Intawong Suwannakiri, Deputy Government Spokesperson, revealed that the Cabinet meeting resolved to acknowledge the extension of the Bilateral Swap Agreement between the Bank of Thailand (BOT) and the Ministry of Finance of Japan (BSA) as proposed by the Ministry of Finance (MOF) to be a financial mechanism to provide assistance to each other in the event of a balance of payments problem or short-term liquidity shortage, and to supplement the financial assistance received from the Chiang Mai Initiative Multilateralism (CMIM) Agreement. The BOT and the Japanese Ministry of Finance signed the first BSA in 2001 with a budget of 3 billion USD. It has been continuously improved and renewed, and there have been 5 BSAs in total. The Cabinet has resolved to acknowledge the BSA extension, which is scheduled to be signed in July 2024. The new BSA has the main content to extend the current agreement for another 3 years, until July 23, 2027. This BSA extension does not affect other main contents of the BSA, as detailed below: 1. Mechanism format: (1) Crisis resolution mechanism and (2) Crisis prevention mechanism . 2. Withdrawal format: (1) Two-way withdrawal for US dollars (Two-Way) and (2) One-way withdrawal for yen (One-Way), in which the BOT can withdraw in yen. 3. The maximum amount that can be withdrawn includes (1) in the case of requesting to use the credit line from BSA only, the maximum amount that can be withdrawn is 600 million US dollars. (2) in the case of requesting to use the credit line from both BSA and CMIM that is not linked to assistance from the International Monetary Fund (IMF De-inked Portion), the maximum amount that can be withdrawn is 1.2 billion US dollars. and (3) in the case of requesting to use the credit line from both BSA and CMIM that is linked to assistance from the IMF (IMF Linked Portion), the maximum amount that can be withdrawn is 3 billion US dollars. 4. The interest rate (Reference Rate) is in accordance with the CMIM agreement. 5. The contract period is 3 years. The issue related to the Ministry of Finance that the Minister of Finance must sign the letter of acknowledgement of commitment in the event that the BOT requests assistance from the BSA Agreement has not changed from the current Agreement. Benefits and Impacts 1. The renewal of the BSA is a mechanism to increase liquidity in the event that Thailand experiences a liquidity shortage or balance of payments problems, and will promote financial cooperation between Thailand and Japan. 2. The renewal of the BSA is consistent with the government's policy in creating Thailand's role on the world stage, emphasizing the balance of diplomatic relations with various countries based on the country's interests, strengthening relations with neighboring countries, and maintaining Thailand's leading role in the region and subregion, as well as creating cooperat ion with groups of countries, international economic and development organizations, to enhance Thailand's confidence and security. Source: Thai News Agency