Rising Baht A Bonus For Thai Govt

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POLITICS

Rising baht a bonus for govt

By Piyanart Srivalo

The Nation

Government agencies stand to reap foreign exchange gains of over Bt5 billion based on exchange rates as of November 26, thanks to the rising value of the baht, according to Budget Bureau estimates.

In a paper to be tabled at today's Cabinet meeting, the bureau says there are two types of foreign exchange gains to be reaped during the 2011 fiscal year: procurement budgets and expenses denominated in foreign currencies worth a total of Bt61 billion. Government expenditure for the fiscal year is set at Bt2.07 trillion, with foreign currency expenditure estimated at 2.95 per cent of the total budget.

"Government agencies with foreign currency expenses and benefit from the strong baht should submit reports to their ministers, so the benefits can be channelled for other government projects," the bureau said.

The bureau, assigned by Cabinet in October to report on possible benefits from the rise in the baht, estimated forex gains at Bt5.8 billion.

About two thirds or 63 per cent of foreign currency spending - Bt38.4 billion - is earmarked for the import of equipment.

Meanwhile, some agencies plan to spend Bt14.4 billion on other expenses like scholarships, overseas operations and memberships for international organisations. Of total expenses, 45 per cent is in US dollars, 19 per cent in euros, 8.5 per cent in Japanese yen, and 27.4 per cent in other currencies.

Based on the exchange rates on the day the budget was set, November 26, the baht gained nearly 17 per cent against the euro, over 12 per cent against the pound and 11 per cent against the US dollar. It also gained 1.1 per cent against the yen.

Meanwhile, the Finance Ministry will present a Government Savings Bank plan today to lend Bt2 billion to freelance business people affected by natural disasters. Each will be allowed to borrow no more than Bt50,000 to fix their properties or to raise capital. The maximum term is five years, and borrowers will be subject to a 0.5 per cent interest.

The ministry will also seek Cabinet approval for Thailand Post to set up a micro-finance business. The Transport Ministry will also seek Cabinet nod for Bt2 billion to help the State Railway of Thailand set up a wholly-owned subsidiary to operate the Airport Rail Link.

-- The Nation 2010-12-07

[softgeorge]

But is it good for exports and the rice farmers.

[phaethon]

But is it good for exports and the rice farmers.

Who cares? They don't run the place...

[marquess]

They must be paying less of oil, I did notice that the Custard Creams have gone down by 5 Baht at Tops, but that is about the only benefit that has been passed on to the customer/consumer.

[londonthai]

But is it good for exports and the rice farmers.

the opposite it true - stronger baht means smaller demand for thai products, smaller production and smaller income to the farmers. At some stage the government might just directly support them, as it's done in europe

[londonthai]

double post

Edited December 7, 2010 by londonthai