Bonding for the future: Thai govt sets sail with expanded issuance

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The director-general of the Public Debt Management Office (PDMO) yesterday asserted that the planned issuance of government bonds in fiscal next year will be proportionate and appropriate. The limit for bond issuance for the said fiscal year has been expanded by approximately 160 billion baht.

 

Patricia Mongkhonvanit revealed the increase is intended to counterbalance the budget deficit for fiscal next year and foster the growth of the domestic bond market.

 

“The issuance of government bonds has not been excessive, which would lead to oversupply in the market. We believe issuance is at an appropriate level and we are confident the market can support it.”

 

While discussing the high yield of 10-year government bonds, she pointed out that it was influenced by numerous factors. These include policy rate increases overseas, a rise in domestic money market interest rates, and the availability of more alternative investment options for investors. The yield of 10-year government bonds last year was higher than the current level, she added.

 

She further stated that the escalating yields align with the global trend of increasing interest rates, which will consequently amplify the government’s fiscal burden for interest payments. However, the PDMO plans to restructure short-term debt into long-term debt with fixed interest rates, thereby reducing the government’s fiscal burden.

 

By Alex Morgan

Caption: Photo via Thai Embassy

 

Full story: The Thaiger 2023-09-22

 

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