BOT sees no need to tap IMF’s Special Drawing Rights facility
The Bank of Thailand (BOT) on Friday said it had no compulsion to utilise the International Monetary Fund (IMF)’s Special Drawing Rights (SDR) as the countrys current foreign exchange reserves were adequate to meet its commitments.
SDRs are international reserve assets created by the IMF to supplement the official reserves of member countries. The value of an SDR is based on a basket of five -- the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling. SDRs are allocated to IMF member countries in proportion to their relative share in the IMF. Countries can exchange SDRs for hard currencies with other IMF members.
The IMF on August 23 had allocated a historic budget of $650 billion for the SDR project with the aim of helping countries revive their economies that had been hit by Covid-19.
“If we use an SDR, we will need to pay interest to the IMF. This interest is based on the five currencies whose value could rise over time,” the BOT said.
“SDRs are suitable for countries that do not have enough foreign reserves to pay for foreign expenditure, such as trade debts, which is not the case with Thailand,” the BOT said.