BANGKOK, June 12 Thailand's military government
has secured a loan of 40 billion baht ($1.2 billion) to help pay
money owed to rice farmers under a controversial state
rice-buying scheme, the second loan it has secured, a senior
Finance Ministry official said on Thursday.
The military government that seized power on May 22 has
acted fast to resolve the problem of the money owed to farmers,
with a state farm bank using its reserves to begin making
Three banks won a bid to provide the loan, for three years
with an average annual interest rate of 2.2705 percent,
Chularat Suteethorn, head of the ministry's public debt
management office, told reporters.
The rate is much lower than a yield of 2.46 percent on
three-year government bonds on Wednesday.
"It's the second time in history that we got a borrowing
rate lower than a yield on government bonds with the same
maturity," Chularat said.
The state-run Government Savings Bank (GSB) will lend 20
billion baht, Bank of Ayudhaya will provide 10 billion
baht and Bank of Tokyo-Mitsubishi UFJ will give 10 billion baht,
The money must be given to the ministry on June 19, Chularat
said after the auction, at which 11 banks had offered to lend a
combined 114 billion baht.
Earlier this month, the ministry tendered for a 50 billion
baht loan, 12 banks offered a total 145 billion baht, and the
GSB won the bid at a rate of 2.1792 percent.
The borrowing will help cover total arrears of about 90
billion baht that had been owed to about 800,000 farmers.
They were left unpaid for months because a caretaker
government did not have the authority to get funds from the
central state budget and banks proved unwilling to lend to it.
The military now has the power to secure funds. It has made
paying the farmers one of its priorities.
The GSB suffered big withdrawals of cash in February when
some depositors protested against its decision to lend 5 billion
baht to a state farm bank so the government of Prime Minister
Yingluck Shinawatra could pay some farmers.
The savers had been unwilling to see their money used to
help the government while others worried the loan would somehow
destabilise the bank.
The bank called back the loan and its president resigned.
(Reporting by Kitiphong Thaichareon; Writing by Orathai
Sriring; Editing by Robert Birsel)