A draft bill on public debt management would cap treasury bills at 3% of annual and extra budget expenditure to let the state manage liquidity more efficiently.
Treasury bills are a debt instrument issued by the Finance Ministry with a 120-day maturity. They are used to maintain adequate money for budget disbursement while the government awaits revenue.
The current law stipulates that borrowing, including treasury bill issuance, must not exceed 20% of annual and extra budget expenditure.
The draft bill is expected to be deliberated in the National Legislative Assembly by November after already winning approval from the Council of State and passing a public hearing, said Prapas Kong-Ied, director-general of the Public Debt Management Office (PDMO).
The law will also require a report to parliament of the outstanding treasury bills at the end of every fiscal year, Mr Prapas said.
Apart from setting the treasury bill ratio, the bill will also include a borrowing period extension for borrowing used to fund budget deficits, he said.
The current law requires the Finance Ministry to borrow for financing budget deficits within the same fiscal year. The government then faces unnecessary costs for borrowing in advance in the event of a carry-over budget, Mr Prapas said.
The cabinet on Sept 12 approved a public debt plan worth 1.5 trillion baht for fiscal 2018. Of the total, 582 billion baht is new debt and the remainder is rolled over.
Public debt amounted to 6.27 trillion baht, representing 41.9% of GDP, at the end of August.
The PDMO recently said it would focus on issuing bonds with maturities in a range of five to 50 years for fiscal 2018, which began Oct 1, to lock in low interest rates.
Amid this fluctuating backdrop stemming from the US Federal Reserve's rate hike prospects, the PDMO will also concentrate on cost management by floating some short-dated notes to trim costs.
The office has said it will convert US$250 million in dollar debt to a baht-denominated obligation to curb foreign exchange risk.
The currency debt swap is a policy of Finance Minister Apisak Tantivorawong.