Bangkok--29 Sep--Moody's Investors Service
Moody's Investors Service reacted positively to the creation of Thailand's new economic advisory committee appointed by the military leadership that took power on Sept 19. The committee is the creation of the military's Council for Democratic Reform (CDR) that now governs the country.
"The committee may help bolster confidence by ensuring sound economic policies," said Moody's Vice President Thomas Byrne. He noted that the committee is chaired by the governor of the Bank of Thailand, Pridiyathorn Devakula, who has steadily steered monetary and exchange rate policy as the central bank amassed a substantial amount of international reserves, $60 billion, which is larger than Thailand's total external debt.
"There has also been noticeable progress in the restructuring of the Thai banking system, and the central bank has curbed excessive lending by state-owned financial institutions," said Byrne.
While he called the formation of a pragmatic and conservative advisory committee "a good step forward," Moody's lead analyst for Thailand said the articulation of economic policies by the CDR would help further boost confidence, which had eroded during the political tensions of the past nine months before receiving an additional jolt from the coup.
"We recognize that uncertainty still exists over future political and economic developments and will closely monitor how events unfold," said Byrne.
He said that fiscal and external indicators of Thailand's creditworthiness suggest that the country has a low level of vulnerability to exchange rate and interest rate shocks, or to an adverse shift in foreign creditor confidence. "This should provide some breathing room for restoring Thailand's democratic and constitutional institutions, on which the long-run economic and financial stability of the country most likely depend."
Moody's affirmed its investment-grade ratings for Thailand on Sept 20. They include:
Foreign and local currency government bond ratings: Baa1
Foreign currency country ceiling: A3
Foreign currency deposit ceiling: Baa1
Local currency deposit ceiling: Aa2
Local currency bond ceiling: Aa2
The outlook for Thailand's sovereign ratings is stable.
New York
Vincent J. Truglia
Managing Director
Sovereign Risk Unit
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Thomas J. Byrne
VP - Senior Credit Officer
Sovereign Risk Unit
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653