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Goldman's On KRW & THB


Goldman Sachs state the won could benefit from improved growth expectations, although don't expect positive news from FTSE/Russell's mid year review (due 31st March) in terms of KTB WGBI inclusion. The bank also stays constructive on THB.

"If banking stresses turn out to be more limited and growth expectations improve more broadly then that should be supportive of the KRW within Asia, which is highly levered to global growth. Investors will also be watching out for FTSE Russell’s mid-year review due on 31st March to gauge the likelihood of Korean bonds eligibility into the WGBI index. Given there are several developments still in progress (i.e., streamlining the tax waiver / bond registration process for foreigners and third-party FX), we think FTSE may require more time to assess the improvement of the announced measures to improve Korea’s market access. The government has recently conceded that the March inclusion would not be realistic and has indicated that concerted efforts will be made for visible progress in key areas to qualify for the inclusion in September. And we remain constructive on THB which has behaved like Asia’s safe-haven recently, as rebounding tourism and lower oil prices is turning the current account back into surplus, while external debt is low and FX reserves are robust."

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