BANGKOK, Thailand – The Bank of Thailand (BOT) has acknowledged ongoing discussions about leveraging the country’s foreign reserves for higher returns, following remarks from the National Economic and Social Development Council (NESDC) suggesting that part of the 9 trillion baht in reserves could support a Sovereign Wealth Fund (SWF). Ms. Chayawadee Chai-anant, Assistant Governor and BOT spokesperson, said the idea has been raised before, and the central bank does not oppose it. However, she stressed the need for careful study and consideration of Thailand’s readiness.
Chayawadee emphasized that creating an SWF requires determining an appropriate fund size, ensuring transparent management, and establishing strong governance. She cited examples such as Singapore’s GIC, which was supported by trade surpluses, and Middle Eastern nations that used natural resource revenues to build reserves. Thailand’s reserves, by contrast, are largely derived from foreign direct investment and foreign exchange management, with a portion needed to support currency operations and maintain creditworthiness.
In response to recent gold price increases, which have reached 60,000 baht, the BOT will meet with the Gold Traders Association this week. The central bank seeks to understand how gold businesses might help stabilize the market and manage the impact on the Thai baht. The BOT reiterated that international gold trade should continue in U.S. dollars.
Chayawadee also addressed the rise in Net Errors and Omissions (NEO), which reached USD 3.3 billion in Q3. She clarified that this increase is not necessarily linked to illicit financial flows. (NNT)
