Bangkok Post: The world windows to Thailand

Asean's recent co-operation on channelling central bank funds into infrastructure projects is likely to move forward when finance ministers discuss the issue next week.

Finance ministers will meet to discuss the matter on the sidelines of the Apec summit in Singapore, said Finance Minister Korn Chatikavanij.

The fund is expected to require $1.25 billion baht in capital to set up a special entity that will issue bonds with high ratings in which central banks can transfer foreign reserves to subscribe, Mr Korn said.

"This will allow central banks to invest their foreign reserves in other instruments than the US dollar, which has generated very low yields and tends to keep weakening,'' he said.

The initiative was co-sponsored by the Thai and Malaysian governments. Asean finance ministers agreed in principle on the fund during the summit in Cha-am last month.

Thailand has witnessed a surge in official reserves as a result of trade and capital flows and the Bank of Thailand's bid to keep the baht weak by buying dollars from the market -- a trend that has sparked concern about possible losses from the greenback's depreciation.

Foreign reserves stood at US$136 billion as of October 23, compared with $110 billion at the beginning of the year.