Reports claim that Europe's debt problems may lead to a sudden rise in the demand for dollar funding.

The swap offered rates have fell in Thailand due to the debt problems in Europe. Concerns over dollar funding shortages have led to immense pressure on the forex swaps and interest rate swaps in Thailand.

The fixing rate of 6 months THB6MFIX=TH fell to 0.90% from 1.15%. A 17bps was experienced in the 3-month rate to 0.73%.

Due to the concerns of dollar liquidity, onshore dollar premiums fell in India. The fear that foreign investors could exit, the Mumbai interbank forward offered rate (MIFOR) reduced to 4.03 % from 4.13%.

According to R. K. Gurumurthy, head of treasury at ING Vysya Bank, 'the dollar scarcity would not happen overnight though longer tenors MIFORs are being received.'

Following the downgrade review of Portugal's three month credit rating, a drop in the assets of the emerging markets was experienced on Thursday.

In New Zealand, following the positive comments from the central bank, the swap rates rose. As per the reports, the central bank is looking at a rise in the interest rates in small steps from the middle of the year.

The two-year swaps NZDSM3NB2Y= rose 17 basis points and the 10-year swap rates NZDSM3NB2Y= went up by 7 basis points.