ADB loan of Bt48bn will not strain public debt, says govt

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ADB loan of Bt48bn will not strain public debt, says govt

By The Nation

 

Credit : Public Debt Management Office, data as of June 30.

 

The Cabinet on Tuesday (August 4) approved the Finance Ministry’s proposal to borrow US$1.5 billion (Bt48 billion) from the Asian Development Bank. The loan will be used to finance Covid-19 recovery projects, said Rachada Dhnadirek, deputy government spokeswoman.

 

The new loan would not raise public debt in a foreign currency too high, she assured.

 

The ADB loanwill raise foreign currency  debt to 2.46 per cent of total public debt, well within the prudent limit set at 10 per cent, she said.

 

The new $1.5 billion loan will be based on an exchange rate of Bt32 per dollar, equivalent to Bt48 billion. The interest rate charge is floated and referenced the six month average LIBOR rate plus 0.5 per cent risk premium. The government must pay interest every six months, or on February 15 and August 15.

 

The ADB will also collect an annual fee of 0.15 per cent.

 

Regarding principal repayment, the first $500 million must be paid within 10 years, with a three-year grace period. The remaining $1 billion loan is for five years with a three-year grace period.

 

The first repayment on the $500 million loan is due on August 15, 2023 and the final amount on February 15, 2030.

 

The first repayment on the 1 billion is due on August 15, 2023 and the last instalment on June 30, 2025.

 

According to the Public Debt Management Office, as of June 30, Thailand’s public debt stood at Bt7.4 trillion, or 44.76 per cent of GDP. Foreign currency debt was at 1.90 per cent of total public debt – a relatively low level.

 

Source: https://www.nationthailand.com/business/30392437

 

-- © Copyright The Nation Thailand 2020-08-05

 

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[RichardColeman]

Don't get it. Loads of people on here keep spouting Thailand has great reserves, and are out borrowing money. 

[Andycoops]

More for the corrupt snouts to feed on.

 

[tso310]

Well that will keep Thai flying for a few more years.