News Brief No. 98/54

News Brief: IMF Completes Review and Approves US$140 Million Credit Tranche for Thailand

December 15, 1998

Michel Camdessus, Managing Director of the International Monetary Fund (IMF), said: "I am pleased to announce that the IMF’s Executive Board today approved the completion of the fifth review under the stand-by credit. As a result, bilateral and multilateral contributors will disburse an additional US$500 million under Thailand’s financing package. Of this, the IMF will contribute SDR 100 million (about US$140 million). I commend the Thai authorities for diligently implementing an appropriate policy framework and consolidating the stabilization gains achieved earlier in the year. Thus, the exchange rate has strengthened and stabilized, net foreign exchange reserves have increased substantially, and inflation has declined to very low levels. There are now signs that these stabilization gains are benefitting the real economy."

Camdessus said that, with these achievements, the program is now well placed to generate economic recovery. He welcomed the easing of fiscal policy, and the strengthening of the social safety net. These factors, along with the significant interest rate reductions that have taken place in recent months, will provide a strong foundation for economic growth next year. "The authorities have taken major steps in realizing their ambitious agenda for structural reforms. Considerable progress has already been made in financial and corporate sector restructuring. I would, once again like to reiterate the importance of early reform of bankruptcy protection laws as a means of promoting corporate debt restructuring. Further progress in all these areas will be crucial to generating sustained economic recovery." Camdessus noted that the Thai economic program continues to be implemented with the active support of the World Bank and the Asian Development Bank.