Two Decades of International Reserves Accumulation for the Financial Security of Thailand

Abstract

This article explains the meaning and the importance of the international reserves. It also reports the state of Thailand’s international reserves that have been accumulating over the past two decades.  These reserves include gold, Special Drawing Rights, foreign currencies, and reserves at IMF. As of the end of 2020, Thailand had over 2.58 trillion U.S. dollar of international reserves which is ranked as the thirteenth highest in the world, and considered as financially secure. This paper also explains Thailand’s Balance of Payments happened to be on surplus almost every years after the 1997 financial crisis which leads to the continual increasing of Thailand’s international reserves. In addition, this paper discusses about an alternative way to manage the excess international reserves by establishing a Sovereign Wealth Fund. This type of fund has pros and cons that need to be carefully studied before establishment.