Thailand to raise $21b through government bonds

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baht ThaiThe Thai government plans to raise more than 700 billion baht ($21 billion) in 2014, mainly by issuing bonds, Chularat Suteethorn, director-general of the Public Debt Management Office, said on September 11.

Of the amount, a portion will be used to offset the budget deficit of $7.5 billion. Another $4.5 billion will be invested in infrastructure, and a portion will be used to roll over debt of around $7 billion.

Of total debt, 50 per cent would be raised from the issuance of government bonds, $2.3 billion from inflation-linked bonds, $1.7 billion from savings bonds and $1.7 billion from amortising bonds.

After consultation with the Bank of Thailand, the office was assured that the plan would not drain the liquidity in the system and there was room to seek as much as $45 billion.

The office said that the interest rate trend looks stable in the short term to the first quarter of 2014 before dropping slightly, but it is likely to go up in the second half of next year to 2.5-3 per cent, considering this an “acceptable cost.” It estimates the public debt-to-GDP ratio at 47.2 per cent in 2014.

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Reading Time: 1 minute

The Thai government plans to raise more than 700 billion baht ($21 billion) in 2014, mainly by issuing bonds, Chularat Suteethorn, director-general of the Public Debt Management Office, said on September 11.

Reading Time: 1 minute

baht ThaiThe Thai government plans to raise more than 700 billion baht ($21 billion) in 2014, mainly by issuing bonds, Chularat Suteethorn, director-general of the Public Debt Management Office, said on September 11.

Of the amount, a portion will be used to offset the budget deficit of $7.5 billion. Another $4.5 billion will be invested in infrastructure, and a portion will be used to roll over debt of around $7 billion.

Of total debt, 50 per cent would be raised from the issuance of government bonds, $2.3 billion from inflation-linked bonds, $1.7 billion from savings bonds and $1.7 billion from amortising bonds.

After consultation with the Bank of Thailand, the office was assured that the plan would not drain the liquidity in the system and there was room to seek as much as $45 billion.

The office said that the interest rate trend looks stable in the short term to the first quarter of 2014 before dropping slightly, but it is likely to go up in the second half of next year to 2.5-3 per cent, considering this an “acceptable cost.” It estimates the public debt-to-GDP ratio at 47.2 per cent in 2014.

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