Thailand 'wont' follow Jakarta debt freeze'<\/p>\n
BANGKOK (Reuters): Thailand is unlikely to follow Indonesia's
\npath in freezing debt repayments, analysts and economists said
\nyesterday.<\/p>\n
Although the wobbly baht remains under pressure and has lost
\nmore than 50 percent of its value since last July, the Thai
\ncurrency has recently been more stable.<\/p>\n
Other positive factors were Thailand's sweeping financial
\nreforms and strict adherence to an International Monetary Fund
\nprogram linked to a $17.2 billion bail-out package, they said.<\/p>\n
In addition, a relatively more stable Thai political situation
\nthan in Indonesia and a healthier debt to foreign reserves ratio
\nwere seen as other key elements that would keep Thailand's path
\ndivergent from Indonesia's.<\/p>\n
\"It is far more unlikely (for Thailand). One reason is that
\nthe currency has not gone as far as (the rupiah) has. There is
\nmuch more stability in terms of the government here,\" said Russel
\nKopp, head of research at Dresdner Kleinwort Benson in Bangkok.<\/p>\n
\"To me, Indonesia is in a period of near anarchy. It's
\ndecidedly different. The other thing is, Thailand today has done
\nreasonably well IMF-wise. And there is some hope or optimism that
\nThailand can be first in, first out (of the crisis),\" he said.<\/p>\n
Indonesia said on Tuesday its debt-ridden companies would
\ntemporarily halt repayments to allow time for new debt servicing
\narrangements.<\/p>\n
A key reason for the temporary debt freeze was the rupiah's
\nplunge to around 11,000 per dollar now from 2,400 in July.
\nThe country's total debt is estimated at $140 billion, of which
\ncorporate debt is put at around $66 billion.<\/p>\n
Arporn Chewakrengkai, economic adviser to Thai Prime Minister
\nChuan Leekpai, said that Thailand was in a stronger position
\nbecause its proportion of foreign debt to reserves was better.
\n\"Indonesia's foreign debt is about $140 billion but its foreign
\nreserves are just $20 billion,\" she said.<\/p>\n
\"Thailand also suffers a debt crisis but our foreign reserves
\nstood at around $27 billion at end December while the total
\nforeign debt was only around $90 billion,\" she said.<\/p>\n
Analysts agreed that so far Thailand had moved in the right
\ndirection and made impressive progress in solving its problems,
\nalthough much still needed to be done.<\/p>\n
Commercial banks have been ordered to recapitalize heavily to
\nstrengthen their financial base and to bring in fresh capital.
\nThe current account has moved into surplus in recent months,
\nevidence that Thailand's austerity measures have started to show
\npositive results.<\/p>\n
Sluggish demand has dented imports and the weaker baht has
\nboosted exports. The Bank of Thailand expects the positive trend
\nto continue.<\/p>\n
The favorable current account outlook is expected to help take
\npressure off the baht.<\/p>\n
But despite signs of improving prospects, some analysts
\ncautioned that the time was not ripe yet for rejoicing.<\/p>\n
\"The baht remains Thailand's most vulnerable point due to the
\nforeign debt overhang. There are big (forex) forward positions
\nthat Thailand will have to settle soon,\" said an economist at a
\nEuropean bank.<\/p>\n
\"But the outlook for a debt-rollover appears more encouraging.
\nFrom now until March would be one of the most challenging
\nperiods. If you survive it, the prospect for any debt repayment
\nfreeze or moratorium will be even far more remote,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/thailand-wont-follow-jakarta-debt-freeze-1447893297",
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