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Tuesday September 6, 2011

Thai central bank to discuss sovereign wealth fund

BANGKOK: Thailand’s central bank board will discuss a plan to set up a sovereign wealth fund as suggested by the finance minister and expects to have a conclusion in a month, the central bank governor said yesterday.

“A fund must be creative and we need to look at all aspects. We have a month to look at it,” Prasarn Trairaivorakul told reporters.

Law amendments would be required to expand investment options as the central bank currently invested in highly secured and liquid assets, he said.

Last week, Finance Minister Thirachai Phuvanatnaranubala urged the central bank to look at ways to make better use of the country’s US$189bil in foreign reserves.

The idea came from Energy Minister Pichai Naripthaphan who said the government would talk to the central bank about setting up such a fund and using some of the country’s foreign reserves to invest in commodities such as gold and oil and in yuan-denominated assets, in light of the weakness in the dollar.

The central bank has said investing part of the country’s foreign reserves in commodities such as oil would carry high risks.

However, Thirachai said yesterday he would not rush to establish the fund and would consult with related parties.

“We have to study it slowly ... The central bank will look at it and see what we should be careful of,” he said.

He said the fund would be set up on a separate account and use foreign reserves left from all obligations and it would not touch money or gold donations. — Reuters

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