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Banks

Thailand announces $58 billion plan to mitigate coronavirus impact

BANGKOK (Reuters) - Thailand’s cabinet approved a package of economic measures worth 1.9 trillion baht ($58 billion) on Tuesday to alleviate the impact of the coronavirus outbreak, Finance Minister Uttama Savanayana said.

FILE PHOTO: A woman wearing a protective mask looks at her phone as she walks on a street, as Thailand imposes a nationwide night curfew from Friday April 3, to try to curb the spread of the coronavirus disease (COVID-19) in Bangkok, Thailand, April 4, 2020. REUTERS/Soe Zeya Tun/File Photo

The package for Southeast Asia’s second-largest economy includes a law to borrow 1 trillion baht plus central bank measures worth another 900 billion baht in soft loans and support for corporate bonds, Uttama told a news conference.

Of the 1 trillion baht borrowing, 600 billion baht will be for public heath works and relief measures, and the rest for rebuilding the economy and job creation, Uttama said.

The government expects to start borrowing in early May, mainly from domestic sources, he said.

The latest steps follow billions of dollars of stimulus measures recently introduced to cope with the impact of the coronavirus on the economy, which is heading into a recession.

Thailand has confirmed 2,258 cases and 27 deaths since the outbreak began in January.

The country is in a state of emergency. Last Friday, it imposed a nationwide night curfew after closing malls to limit the spread of the virus.

The Bank of Thailand (BOT) will provide soft loans worth 500 billion baht plus a loan payment holiday to help smaller businesses hit by the outbreak, Governor Veerathai Santiprabhob told a separate news conference.

The BOT will also set up a corporate bond stabilisation fund worth 400 billion baht to provide bridge financing to high-quality firms with bonds maturing during 2020-2021, he said.

The central bank will also reduce financial institutions’ payment to the Financial Institutions Development Fund (FIDF) for two years to 0.23% of deposits per annum from 0.46%.

“The BOT continues to closely monitor the situation and stands ready to take further steps as necessary,” Veerathai said.

Reporting by Orathai Sriring, Kitiphong Thaichareon and Satawasin Staporncharnchai; editing by Raju Gopalakrishnan

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