Exim chief: Use BoT reserves

Narongchai Arkkaraseranee, chairman of the Export-Import Bank of Thailand (Exim Bank), said on Wednesday that he agreed with the idea of using the foreign reserves of the Bank of Thailand (BoT) to assist economic recovery.

Mr Narongchai said proper use of the central bank’s reserve would reduce the demand which is keeping the baht too strong for exporters.

Total foreign reserves were likely to increase to as much as US$140 billion by the end of this year on the back of the surplus in the country’s current account. This would make the Thai currency even stronger, at about 33 per US dollar, later this year.

The Exim bank chairman said the BoT can use its foreign reserve through the authority of its committee on foreign reserve management without having to amend any law.

The reserve could be use to invest in development projects that need foreign currencies, or in foreign bonds issued by the Ministry of Finance or state enterprises. There was nothing wrong in making such investments.

“Normally, the foreign reserve should stand at about six times the value of imports, or about US$80 to 90 billion, which is adequate for short-term debt repayment.

''The BoT now has US$120 billion in foreign reserves. The central bank could use  $20 to 30 billion of this money for investment in projects for the benefit of the country,” Mr Narongchai said.