Sovereign wealth fund mowed down

Sovereign wealth fund mowed down

Mr Uttama gave the keynote speech at the Asian Financial Forum, which ends today. Wichit Chantanusornsiri
Mr Uttama gave the keynote speech at the Asian Financial Forum, which ends today. Wichit Chantanusornsiri

Finance Minister Uttama Savanayana has ruled out the private sector's request that policymakers to set up a sovereign wealth fund to curb the baht's strength.

The government has no plans to establish a sovereign wealth fund because the incorporation would require the consideration of multiple issues including the laws and scope of investment, he said.

Several countries including Singapore have set up sovereign wealth funds as their laws allow them to do so, said Mr Uttama.

Calls for the Bank of Thailand to earmark some foreign reserves to invest through a sovereign wealth fund to generate higher returns and tame the baht's rise have been made from time to time.

Thailand is among the world's top 20 in foreign reserve holdings and this has made the country stand out as a safe haven, with the baht climbing significantly last year.

As of Jan 3, Thailand's international reserves amounted to US$227.5 billion.

The baht was the top performing currency in Asia, gaining almost 9% in 2019, as the local currency surpassed 30 to the greenback near the end of the year.

However, the baht has weakened almost 1% so far this year.

Mr Uttama said managing the baht is of interest to financial institutions' executives and investment advisers in Hong Kong.

Managing the baht to move in line with the country's economic growth potential is the government's policy and measures will be imposed if needed, but such measures will not be in contrast to market norms, he said.

The political situation in Thailand has not been questioned by foreign investors, suggesting that they are not concerned, said Mr Uttama.

"Most investors, particularly those from China and Hong Kong, are interested in investing in Thailand," he said.

"They show enthusiasm for the food, real estate and startup sectors."

Mr Uttama has discussed cooperation in setting up meetings between small and medium-sized enterprises (SMEs) from Hong Kong and Thailand by early March with the Hong Kong Trade Development Council.

Thai SME industries with growth potential include electronics, food, design and film, he said.

Mr Uttama said the government plans to add value to the digital infrastructure by using blockchain technology as the backbone for development within economic and social agencies, including the Stock Exchange of Thailand and the Securities and Exchange Commission.

Innovation will be the main growth driver from now on, he said.

Thailand has developed a digital basic infrastructure, including national e-payment and the Universal Service Obligation Net project, to enable the private sector to develop new applications to keep pace with consumer demand and drive inclusive growth, said Mr Uttama.

The government has used national e-payment as a tool to deliver welfare and economic stimuli to target groups that in turn, allow the government to have information, he said.

Next, the government plans to adopt big data to analyse the information gathered, helping it design policies that best meet peoples' needs, said Mr Uttama.

Digital lending opens up opportunities for small lenders to be in neck-and-neck competition with banks, while the Finance Ministry has encouraged fintech firms by granting them 251 payment licences over the past two years.

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