FIDF
borrowings became larger and larger (reaching over 700 billion Baht in May 1998), the
interest rate in the RP market was over 20 percent per annum in the first quarter of 1998, and
there was real danger that the whole financial system would cease to function. The situation
began to improve once the government passed new laws in May 1998 to enable it to issue
government bonds up to Baht 500 billion to pay for the debt of the FIDF, and thereby reduce
the demand in the RP market