Pridiyathorn backs sovereign wealth fund idea

business October 09, 2013 00:00

By The Nation

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Former deputy prime minister MR Pridiyathorn Devakula supports the idea for Thailand to establish a sovereign wealth fund.

The former central banker said that the Bank of Thailand has mulled this option for some time. 
"It's a feasible idea, but the concern is how to finance the fund. Of foreign reserves about US$200 billion, about $60 billion is used to back the issuance of banknotes and the rest is controlled by other departments. It remains to be seen which part would be used to finance the fund," he said.
By law, the Bank of Thailand must maintain reserves at not less than 60 per cent of the notes issued. 
Pridiyathorn said that half of the banknote currency backup could be used and this would not cause a financial problem. However, regarding to general reserves, it entails the cost that the Bank of Thailand spends in building up the reserves.

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