BOT reserve should be utilized
17/06/2009

Narongchai Arkkaraseranee, chairman of the Export-Import Bank of Thailand (EXIM Bank), said on Wednesday that he agreed with the idea to use foreign reserve of the Bank of Thailand for the sake of the country.

Mr Narongchai reasoned that the utilization of the central bank’s reserve will help reduce pressure to make the value of the baht stronger. The amount of foreign reserve is likely to increase to as many as US$140 billion by the end of this year on the back of the surplus in the country’s current account. This will make the Thai currency to become stronger at about 33 per US dollar later this year.

The EXIM bank chairman pointed out that the BOT can use its foreign reserve through the authority of its committee for foreign reserve management without having to amend any law. The reserve can be use to invest in development projects that need foreign currencies or in foreign bonds issued by the Ministry of Finance or state enterprise. It is nothing wrong to make such investments.

“Normally, the foreign reserve should stand at about six times of the import value, or about 80 to 90 billion US dollar, which is adequate for short-term debts repayment. The BoT now has US$120 billion in foreign reserve and thus the central bank can use about 20 to 30 billion US dollar in investment projects for the benefit of the country”, Mr Narongchai said.

bangkokpost.com