BOT allowed to invest in state bonds
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The Bank of Thailand's board of governors on Thursday endorsed the plan for the central bank to invest in state bonds, in the move to spur capital outflows.
Assistant governor Charnchai Boonyaritchaisri, as secretary of the board, announced after the meeting today that the list of investible bonds will be extended to cover state bonds.
At present, the central bank can invest foreign reserves only in government bonds.
"In the US, there are 50 states, but the central bank can invest only in US Treasuries," he said.
It would take some time before the central bank can invest in state bonds, he added. A thorough study is needed, like the credit rating of investible state bonds.
This is seen as a measure to balance the excessive inflows into the Kingdom which has boosted the currency by about 6 per cent from end-2012 level.
