Creditors agree to roll over debt<\/p>\n
BANGKOK (AFP): Thailand's economic chief Supachai Panitchpakdi
\nsaid yesterday foreign creditors had agreed to roll over more
\nthan 50 percent of Thailand's debts due for repayment at year-
\nend.<\/p>\n
The rolling over of the massive debts is crucial to Thailand's
\neconomic recovery, analysts say, as without a deferral of payment
\nthe cash-strapped country could face a devastating moratorium on
\nloans.<\/p>\n
\"This is the thing to watch,\" an executive with a western bank
\ntold AFP. \"If foreign bankers do not roll over their debt, we are
\nheading for a moratorium, which means no new inflow of capital
\ninto the system at all.\"<\/p>\n
Bank of Thailand governor Chaiyawat Wibulwasdi said the
\ncountry's outstanding short-term debt totaled 37 billion dollars
\nas of October.<\/p>\n
He added that long- and short-term debts due for repayment
\nover the next 12 months stand at a massive US$39 billion.<\/p>\n
Foreign debt repayments due in October stood at seven billion
\ndollars, while those due in November totaled five billion
\ndollars, with a further six billion dollars due in December,
\nChaiyawat said.<\/p>\n
Net repayment in October totaled only $700 million because 80-
\n90 percent of the debt was rolled over, he said.<\/p>\n
Supachai said a crucial fresh roll-over had been agreed upon
\nby foreign creditors, in a move which analysts said would allow
\nthe hobbled economy to stagger on.<\/p>\n
Foreign investors agreed to extend the deadline for repayment
\nbecause they \"are confident that the government is acting in
\ncompliance with the International Monetary Fund's requirements,\"
\nhe said.<\/p>\n
Thailand was granted a $17.2 billion IMF rescue deal in
\nAugust, on the condition that it stick to strict IMF conditions
\naimed at pulling the economy out of its slump.<\/p>\n
But the debt problem continued to worsen Wednesday as the
\ncountry's currency plunged to new lows, effectively raising the
\ncost of repaying foreign loans.<\/p>\n
The stock market also fell slightly, on fears about the high
\nlevels of the government and the private sector's foreign debts,
\nwhich stand at over $100 billion.<\/p>\n
Deputy Premier Supachai said the plunging baht should
\nstabilize in the second half of next year, in line with an
\nimprovement in foreign capital inflow, as the government tackles
\neconomic problems by adhering to the IMF guidelines.<\/p>\n
In the near term, the level of the baht is set to improve
\nafter the government makes its scheduled December 8 announcement
\non the future of 58 suspended finance companies, Supachai said.<\/p>\n
The unit plunged to an unprecedented low of 42.95 to 43.05 to
\nthe dollar Wednesday on fears of a negative contagion effect if
\nembattled South Korea fails to strike a deal with the IMF for its
\nown bailout.<\/p>\n
Supachai said the baht has weakened in line with declines in
\nother regional currencies, and rumors of a delay in the procedure
\nfor rehabilitating the 58 suspended companies.<\/p>",
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