Thailand’s Sovereign Credit Rating Changed To “stable”

JCR changes outlook for Thailand’s sovereign credit ratings to “Stable”

BANGKOK: -– Japan Credit Rating Agency has changed its outlook for sovereign credit ratings for Thailand to “Stable” from “Rating Watch Negative.”

Pongpanu Sawetarun, Acting Director-General of the Public Debt Management Office, said JCR had called off Thailand's sovereign credit ratings on credit watch with negative implications and affirmed long -term foreign currency ratings at “A-”, and long-term local currency ratings at “A+.”

JRC viewed the political instability arisen from the military coup on September 19 had ended following a promise by the now-defunct Council for Democratic Reform’s chief to return power to people soon, elect an interim government, and draw up a new constitution.

As well, the political change had not adversely affected the financial market since there was no sign of a capital outflow that could weaken the local currency and fuel the interest hike.

JCR said the appointment of former Bank of Thailand’s governor Pridiyathorn Devakula as the deputy prime minister and finance minister and former executive chairman of Bangkok Bank Kosit Panpiemras as the deputy prime minister and industry minister helped restore investor confidence since both persons are widely recognised by local and foreign investors.

Also, the appointment of an expert and academic, who have reform concepts in mind, as the commerce minister and energy minister helped ease investor concerns the government would not pursue key policies adopted by the previous government such as trade liberalisation and investment in mega-projects.

JRC said the interim government understood a way to carry out the policy and managed to cope with any situations justifiably.

This could be witnessed by the cabinet approval for a budget disbursement for 2007 fiscal year on January and an investment in some mega-projects such as the construction of a mass transit system.

However, it viewed some political uncertainties still existed since a schedule for the adoption of the new constitution and the new election date had yet been set.

A possible return to the country by ousted prime minister Thaksin Shinawatra, who has a large political base in rural areas, is another negative factor to the political stability.

--TNA 2006-11-21