Thai baht notes are seen at a Kasikornbank in Bangkok, Thailand, May 12, 2016. REUTERS/Athit Perawongmetha/File Photo - RTSRW1I
BANGKOK: The Thai government is trying to calm an edgy public over fast-declining treasury reserves, saying the country’s fiscal condition is still healthy and intact.
Treasury reserves have declined from 495.75 billion baht (RM62.72bil) when the present military government seized power in 2014, to 74.91 billion baht (RM9.48bil) as of Jan 27 this year.
Finance Minister Apisak Tantivorawong explained the low-level of reserves was the result of effective management employed by his ministry to minimise interest cost on borrowings.
“We’ve set the optimum level of treasury reserves at 50-100 billion baht. So, having 300-500 billion baht lying around is too much. By keeping reserves low, we can save almost two billion baht (RM253.1mil) in interest cost, an amount that can be better spent,” he was quoted as saying by the local media on Tuesday.
The government, Apisak said, was not broke as the current level of treasury reserves was sufficient.
The former head of Krungthai Bank also pointed out that even if the current level of treasury reserves went lower, the government could borrow 80 billion baht (RM10.12bil) from the financial market to maintain liquidity.
Apisak said the low-level of treasury reserves early in the year was expected as tax revenue would only start to be visible in the coming months.
“We still have a lot of room to manage the fiscal resources and finance the budget deficit,” he added.
At the same time, he dismissed the government’s latest move to increase tax on aviation fuels and motor lubricants, as related to the treasury reserves.
Apisak also noted the current level of treasury reserves at 74.9 billion baht was not the lowest on record, as it had dropped to 52 billion baht in 2009.
Prime Minister Gen Prayut Chan-o-cha when asked about the matter yesterday, also urged the public to not panic over Thailand’s fiscal condition.
The declining treasury reserves, according to him, was because the government had spent more on various infrastructure and economic stimulus measures for the benefit of the country.
Last month, the government agreed to set a larger budget deficit of 450 billion baht (RM56.94bil) for the 2018 fiscal year in an attempt to further spur the local economy. - Bernama
Limited time offer:
Just RM5 per month.
