ASEAN KEY DESTINATIONS
Thai central bank to avoid using reserves
Official reserves have increased markedly since the middle of the week, as the central bank actively bought foreign assets to keep the baht weak. The figure rose as high as US$185 billion, or about half of gross domestic product. The most recent official data from the central bank show foreign reserves, excluding the net forward position, at $170.1 billion as of November 19, down from $171.7 billion a week earlier.
Reserves are expected to increase steadily over the next year as the central bank will be under pressure to trade in the foreign-exchange market to stabilise the baht.
Dr. Prasarn said the central bank would have to be careful in considering any proposal to invest some of the reserves, as it wanted to ensure they remained at a safe level.
In any case, he said, the amount of reserves potentially available for investment would be small, after taking into account various obligations.
"There are many things that we need to take into consideration as to investment of foreign reserves," he said. "We must consider whether the assets are liquid and can be converted easily in time of need, and whether we have enough reserves."
Of the total amount of foreign reserves, around $90 billion matched the total of the country's external debts, $15 billion are locked in to back banknotes circulations and $45 billion reserved for security equivalent to three months of import value.
"There is a small margin of foreign reserves left, so we need to think carefully about how to invest them," according to Dr. Prasarn.
The central bank is also considering shifting more foreign reserves from dollars to yuan, he added.
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