New law to enforce FIDF debt transfer: Kittiratt
Deputy Prime Minister Kittiratt Na-Ranong ponders the issuance of a law, to enforce the transfer of Financial Institutions Development Fund (FIDF)'s debts from the Finance Ministry to the Bank of Thailand.
He insisted that the central bank is financially strong enough to handle the Bt1.14 trillion debts on its own.
The Cabinet on Tuesday endorsed the proposed transfer. Kittiratt is tasked to discuss the plan in detail with the Finance Ministry, Bank of Thailand, Budget Bureau, the National Economic and Social Development Board and the Council of State.
He noted that if the central bank still refuses to take care of the debts, a law would be issued.
Bank of Thailand Governor Prasarn Trairatvorakul today said that the transfer would raise the central bank's losses to Bt1.5 trillion. Though profit and loss is not the central bank's objective, but huge debt burden could raise questions how the central bank can maintain its indenpendence on financial policy implementation in light of huge losses.
"The central bank is not that financially strong," he said, adding that the BOT has shown losses as a result of foreign exchange rate stabilisation.
