Thailand's trade and investment will benefit in the long run from inclusion of the yuan in the special drawing rights (SDR) currency basket of the International Monetary Fund (IMF), says a senior central bank official.
Greater use of the Chinese currency would help to slim down foreign exchange costs and diversify risks, said Mathee Supapongse, deputy governor overseeing monetary stability.
"Thailand should gain an advantage in terms of trade and investment stemming from growing use of the yuan in the coming periods," he said.
Mr Mathee called the IMF's decision to include the yuan in its SDR basket a testament to both China and its currency in terms of trade and foreign investment.
"Interest in using the yuan for settling international transactions and investments will keep increasing," he said. "The convenience [of using the yuan] will rise due to relaxed regulations by Chinese authorities and a familiarity on the part of manufacturers and those associated with trade and foreign investment."
The IMF on Monday added the yuan to its basket, which also comprises the US dollar, euro, British pound and yen, in the first change to the SDR's currency composition since 1999.
The addition will take effect next Oct 1, with the yuan having a 10.92% weighting.
Under the new weightings, the dollar will share 41.73%, euro 30.93%, yen 8.33% and pound 8.09%.
The dollar currently accounts for 41.9% of the basket, euro 37.4%, pound 11.3% and yen 9.4%.
SDR is a unit of account used by the IMF, with the outstanding issuance currently at just over SDR200 billion (US$280 billion).
China is Thailand's top export destination, taking in 11% of outbound shipment value. Any impact from this inclusion on Thailand's financial market is not expected to be significant, as the move is in line with expectations, Mr Mathee said.
Charl Kengchon, managing director of Kasikorn Research Center, said the yuan's SDR entry was only symbolic and would not boost China's currency demand in the short term.
But in the long term, its inclusion could encourage the Chinese central bank to take a more hands-off approach to the currency's movement and stay on the financial reform track, he said, adding that the yuan would then play a greater role in international trade and financial markets.