The Bank of Thailand has calmed down concern about an increase of its liabilities to more than 6 trillion baht, saying they are not public debt.
The Royal Gazette has published the weekly report of its financial position ending April 9. It shows "other liabilities" at 6.13 trillion, with accumulated losses of 957.5 billion baht.
The debt increased from 5.6 trillion baht in the previous week ending Feb 27. By comparison, the liabilities from the same weekly report in March 2015 were at 3.86 trillion baht.
The figures raised concern about the country's fiscal stability, especially after the bills for 1.9 trillion baht Covid 19-relief borrowings were passed last week.
It also brought to mind the painful memories of 1997. With high foreign debt by the private sector, the baht came under attack by foreign speculators. The central bank tried to defend the currency until it ran out of reserves. The chain of events that ensued was the eventual flotation or devaluation of the baht — it fell by more than half at one point — and a domino effect on regional currencies in what went down in history as the Asian financial crisis.
The central bank on Friday evening assured the high figure was not public debt and won't affect the country's fiscal stability.
It explained the central bank's operations — issuing bonds to manage liquidity at appropriate levels, printing banknotes and accepting deposits from commercial banks — increase its liabilities. But at the same time, its assets in the form of foreign reserves or "counterpart assets" also increased in tandem.
"A central bank's debt will not be a burden for the government to repay since it is backed by assets. Besides, a central bank's assets are not the government's," read the information.
Most countries do not count a central bank's debt as public debt, it noted.
Thailand's public debt currently stood at 7.2 trillion baht as of April, or 43% of gross domestic product. With the 1.9-trillion-baht borrowings, the proportion will reach 58% of GDP, slightly below the policy framework's 60% ceiling.