Finance minister pressing on with national wealth fund

0
1223

BANGKOK, 5 September 2011 – Finance Minister Thirachai Phuvanatnaranubala has pledged to press on with the establishment of the national wealth fund as he has confirmed that the process will be made transparently.

The minister explained that the national wealth fund will be set up by separating a small account from the international reserves while the money and gold donated by disciples of revered Abbot Phra Dharmavisuddhimongkhol, also known as Luangta Maha Bua, will not be touched.

Mr Thirachai stated that he wants the Bank of Thailand (BoT) to study the pros and cons of the establishment of the fund and make understanding with related sides in order to draw a conclusion before pressing ahead with the operation.

The minister noted that if the fund is profitable, the BoT will be allowed to deduct expenses on interest costs by issuing bonds to reduce cash flow and liquidity in the market; however, if the fund faces a loss, the government will prepare a budget to cover the burden.

Mr Thirachai admitted that investment comes with risks and profits. He elaborated that so far the BoT has been investing in bonds in the US and EU markets and faced a loss of 260 billion baht last year, plus an exchange rate loss of 100 billion baht.

The minister said the total loss now stands at over 400 billion baht, but the BoT has not yet asked the government to provide a budget to cover the loss because it is considered the bank’s internal responsibility.