Vol. VIII No. 17 - Tuesday
April 28 - May 4, 2009



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by Saichon Paewsoongnern


BUSINESS
HEADLINES [click on headline to view story]:

Finance Minister: Rating downgrade raises borrowing costs minimally

Finance Minister: Rating downgrade raises borrowing costs minimally

The downgrade of Thailand’s local currency rating by Standard & Poor’s earlier this week due to violence and political turmoil will not increase borrowing costs for the Thai government greatly as the government plans to focus on domestic borrowing, Finance Minister Korn Chatikavanij said Thursday.
Liquidity in Thailand remains high and has risen to Bt1.5 trillion while Thai businesses have no plans to borrow internationally due to the sluggish domestic economy, Korn said during an appearance on a TV Channel 9 economic talk show.
The government must rely mainly on domestic borrowing to finance its second round of economic stimulus program requiring a total investment of Bt1.56 trillion, he said.
The downgrade on the currency rating came after Monday’s bloody street clashes in Bangkok between anti-government protesters and government forces which left two persons dead and 123 wounded or injured. The two fatalities occurred when local market vendors clashed with protesters in the absence of government security forces.
Overseas loans, however, are still needed because Thailand still needs foreign currencies for use in importing raw materials, Korn said, but borrowing from abroad will be minimal.
Korn said it is not yet known whether the Bank of Thailand (BoT) Monetary Policy Committee will lower its policy interest rate further to stimulate the domestic economy.
The central bank on April 8 cut its key interest rate by 25 basis points to 1.25 percent in an attempt to spur the domestic economy after finding that the current global economic meltdown is much more severe than earlier thought. (TNA)



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