Thai Minister: gov't borrowing cost to be minimally hit by rating downgrade 2009-04-16 17:36:46   Print

    BANGKOK, April 16 (Xinhua) -- Thailand's local currency rating, which was earlier downgraded by an international rating agency -- Standard & Poor's, due to the country's recent political chaos, would increase the Thai government's borrowing cost minimally since the government plans to focus more on the domestic borrowing, Finance Minister Korn Chatikavanij said Thursday.

    After Thailand's scattered rioting ended, on Tuesday Standard & Poor's lowered Thailand's local currency rating to "A-" from "A" and said the local currency rating's outlook was negative. The country's foreign currency rating was left unchanged at "BBB+", with a negative outlook.

    The liquidity in Thailand's financial market, which has remained ample standing at 1.5 trillion baht (42.39 billion U.S. dollars), will be sufficient for the government to borrow, said Korn, the Thai News Agency reported Thursday.

    The government will rely mainly on the domestic borrowing to finance its second round of economic stimulus programs totally worth of 1.56 trillion baht (44.09 billion U.S. dollars), he said.

    However, overseas loans are essential since Thailand still needs foreign currencies for importing raw materials, Korn said, adding that the overseas borrowing will be minimal.

    Meanwhile, it is not yet known whether the Bank of Thailand's Monetary Policy Committee will lower further its policy interest rate to stimulate the domestic economy, said Korn.

    The central bank on April 8 cut its key interest rate by 25 basis points to 1.25 percent in an attempt to spur the domestic economy, which has been increasingly hit by the global economic meltdown. 

Editor: Wang Yan
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