BOT denies it plans to dip into reserve to purchase govt bonds
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The Bank of Thailand has denied rumours it plans to take money from the international reserve to invest in government bonds, stressing that the reserve is for managing foreign-exchange volatility and the nation's current account.
A recent news report said the BOT governor was holding discussions with the Finance Ministry on setting aside US$5 billion (Bt155 billion) from the international reserve to invest in government and state-enterprise bonds for the Bt2-trillion infrastructure project without establishing a New Opportunity Fund. Assistant Governor Paiboon Kittisrikangwan insisted that the report was not correct.
He said the monetary authorities had not yet considered the issue. The international reserve is required to deal with a deficit situation in the current account or forex volatility, not financing the public sector.
On the upcoming meeting of the US Federal Open Market Committee, he said he expected markets to keep a watch on the Federal Reserve’s action on its quantitative easing programme with a need to monitor foreign-capital movement.
Although foreign capital has already reacted on expectations over the Fed’s likely move, there remain uncertainties that result in market volatility, he said.
