BANGKOK (NNT) – Bank of Thailand clarifies misunderstanding regarding the 6 trillion baht liabilities.
Mrs. Chantavarn Sucharitakul, Assistant Governor, Communications and Corporate Relations Group, Bank of Thailand (BOT) revealed that there has been misunderstanding regarding BOT’s 6 trillion baht liabilities as public debt that will have to be repaid by future generations.
The BOT wishes to clarify that BOT’s financial statements reflect activities of the BOT associated with its central banking operations. When there is excess liquidity in the financial system the BOT absorbs the excess liquidity via instruments such as BOT bonds.
Conversely the BOT inject liquidity back into the system through reduction in BOT bond issuance to maintain an appropriate monetary condition. BOT’s assets and liabilities are therefore conditioned on changes in its financial operations to maintain economic stability.
Like other central banks, the liabilities in the BOT’s account are not considered as public debt, and will not pose fiscal burden on the country. The liabilities shown in BOT’s financial statements are merely reflection of its liquidity management activities.