Cabinet orders joint study on FIDF debt handling

As measures to restore confidence in the aftermooth of the flooding, the Cabinet today also approved the establishment of a Bt50 billion reinsurance fund and the allocation of Bt350 billion for long-term water management projects. Meanwhile, Bank of Thailand is ordered to amend the Bank of Thailand Act, to pave way for soft loan extension. It also approved the extension on diesel excise tax cut by another month to end-January.

 The FIDF-related proposal, presented to the Cabinet, was completed by former deputy prime minister Virabongsa Ramangkura. Aside from a committee on water management, Virabongsa is also appointed chairman of a working committee to deal with the FIDF debts.

‎​Deputy Prime Minister Kittirat Na-Ranong said that the Cabinet approved in principle that the debt would be transferred to the Bank of Thailand. He said that the central bank, with huge international reserves, is capable of handling the debt. Still, he conceded that such transfer may spark criticisms.

 The fund amassed huge debts, which now stand at Bt1.14 trillion, in the aftermath of the 1997 financial crisis which led to the rescue of many banks. The debt servicing is now part of the annual budget expenditure.
 Virabongsa said recently that such debt must be handled. If the principal and interest repayments are not part of the budget expenditure, the country's room to finance water-management infrastructure would be expanded.