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 Bank & Finance
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24 Oct 07 06:18
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Thailand should borrow soft US dollars from abroad, says minister
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TNA
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BANGKOK, Oct 23 - The Thai government as well as the business community should borrow more US dollars from overseas while the American currency is softening, Thailand's Deputy Finance Minister Sommai Phasee said Tuesday.
At a time when some governments and businesses are divesting their dollar holdings, Mr. Sommai's recommendations provide food for thought.
Borrowing greenbacks could also help in refinancing debts, according to the deputy finance minister, adding that Thailand still needed more loans from the Export-Import Bank of China to finance its mega-projects in future.
On Monday, the Thai Cabinet gave a green light to the Finance Ministry to borrow not more than US$400 million for financing of the mega-projects. The loans would be available for the projects which require at least a 50 per cent import content from China and carry an annual interest of three per cent. Repayment will have to be made within 15 years with a five-year grace period.
There are still several mega-projects pending on the long-term and the Thai government cannot discard the Japan Bank for International Cooperation (JBIC) as a source of financing the projects, said Mr. Sommai.
Earlier, the Finance Ministry proposed that JBIC lend funds for the construction of the Bt31.2 billion rail line from Bang Sue to Bang Yai on the outskirts of Bangkok. But the JBIC decision has already been delayed and it is now quite possible for the Thai government to switch to borrowing from the Export-Import Bank of China to finance the project.
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