Thailand's central bank governor Prasarn Trairatvorakul yesterday ruled out the possibility of a sovereign wealth fund any time soon, saying there was a lack of instruments to manage risks.
"We have diversified our investment portfolio within the risk management framework," he said. "There is no initiative to establish any kind of a fund at the moment."
Earlier, Pongpen Ruengvirayudh, the deputy governor overseeing monetary stability, said the bank was studying a plan to use its surplus foreign reserves to establish what would be called a "New Opportunity Fund", aimed at increasing returns as a part of efforts to improve its balance sheet. Such a sovereign wealth fund would be managed by a separate organisation or the central bank.
The Bank of Thailand and the government have for years tussled over using foreign reserves for the establishment of a sovereign wealth fund.
As of Oct 11, Thailand's foreign reserves totalled US$171.6 billion (5.3 trillion baht), and a net forward position amounted to $21.6 billion.
Mr Prasarn said there had been a decline in household debt in the past few months, but the issue still needed to be monitored. The end of some of the government's domestic stimulus measures, the tax rebate for first-time car buyers, consumer wariness of a debt burden and spending were factors contributing to the decline.
He said the household debt ratio might decelerate next year following a large debt run-up in 2012.
As of the first quarter, Thailand's household debt had increased to 8.97 trillion baht, or 77.5% of gross domestic product, compared with 1.36 trillion, or 28.8%, during the 1997 crisis. The low unemployment rate could help to stabilise income levels and spur domestic consumption, Mr Prasarn said, stressing that financial savings can act as a "vaccine" to safeguard against economic uncertainties.