Govt savings bonds at B60bn imminent

Govt savings bonds at B60bn imminent

Funds to be used for state rehab projects

Chatuchak weekend market remains lifeless amid the ongoing outbreak. The Rao Chana savings bonds are aimed at financing projects that will rehabilitate the battered economy. (Photo by Apichart Jinakul)
Chatuchak weekend market remains lifeless amid the ongoing outbreak. The Rao Chana savings bonds are aimed at financing projects that will rehabilitate the battered economy. (Photo by Apichart Jinakul)

The Public Debt Management Office (PDMO) will issue government savings bonds worth 60 billion baht early next month, aiming to use the funds raised to finance government projects that will mitigate the pandemic's impact and rehabilitate the economy.

The Rao Chana (We Win) edition of government savings bonds has an average interest rate of 2-2.5%.

The main objective of the latest savings bond issuance is to raise funds for finance projects aimed at mitigating the pandemic crisis and boosting battered economic conditions, said Patricia Mongkhonvanit, PDMO's director-general.

Savings bonds are an investment instrument that offer good returns during times of fluctuating financial market conditions as a result of high economic uncertainties, she said.

Bond distribution will commence on Feb 1 via the "Sasom Bond Mung Kung" e-wallet, abbreviated as "Sor Bor Mor" in Thai, on Krungthai Bank's (KTB) Pao Tang mobile application.

Bond issuance will also be distributed through dealer banks on Feb 5. The four dealer banks are state-owned KTB, Bangkok Bank, Kasikornbank and Siam Commercial Bank.

The first lot of savings bonds will be distributed via the Sor Bor Mor e-wallet on Feb 1-19, with the total distribution amount valued at 5 billion baht.

The Rao Chana savings bond has a five-year maturity period, with a step-up interest rate of 2% on average per year.

Investors can invest at a minimum of 100 baht and up to 5 million baht at a maximum.

In the second distribution lot via dealer banks from Feb 5- 19, total distribution amount is valued at 55 billion baht and the distribution period is divided into two phases.

The first phase is scheduled for Feb 5-15 for the general public. The savings bond has a five-year maturity period, with a step-up interest rate of 2% on average per year.

For the 10-year maturity savings bond, the interest rate averages at 2.5% per year.

The second phase is scheduled for Feb 16-19 for non-profit juristic persons as defined by the Finance Ministry. The savings bond has a 15-year maturity period and interest is capped at 1.8% per year.

In October 2020, the PDMO was reported to have a public debt management plan of 2.3 trillion baht under the fiscal 2021 budget.

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