Thai private sector debt runs to $72b

Thai private sector debt runs to $72b

BANGKOK (AFP): Thailand's private sector foreign debt stands at $72 billion, with about 50 percent of the sum owed to Japanese creditors, Finance Minister Tarrin Nimmanahaeminda said yesterday.

Officials have said the country's official foreign debt is US$39 billion, with $37 billion in short term debt to be repaid over the next 12 months.

Tarrin was speaking before leaving on an official visit to Japan during which he will discuss crucial loan rollovers and Bangkok's plan to ease unemployment with the help of official Japanese bodies.

The bodies include the Overseas Economic cooperation Fund (OECF) and the Japan Export and Import Bank, whose support is crucial for Thailand's mission to work.

Siam Commercial Bank president Olarn Chaiprawat, representing the private sector, will negotiate the roll-over of debts with Japanese creditors.

Olarn may also discuss with creditors the swapping of dollar loans into yen-denominated loans as the baht and yen fall against the greenback, he said.

Tarrin said the dollar-yen loans swap, if sealed, would benefit the Thai private sector due to the low interest rate on yen loans and the low exchange rate risk.

He stressed that the baht and yen were moving "in the same direction." The comments came a day after the baht plunged to its lowest ever point of 49 to the dollar, compared to 25.79 before its flotation in July.

He also revealed the government planned to issue bonds in dollars to raise funds from domestic and overseas Thais to help ease the country's tight liquidity situation.

"There will be a mini road show next month for Thais living overseas," he said, but did not provide details about the bond- issue program.

However, he said the Government Savings Bank was studying the bond-issue plan.