Thailand worried about strong baht
The Thai government, domestic economists and export associations have expressed deep concern about the continued appreciation of the country’s currency, which is now predicted to hit 27 baht per dollar, far stronger than what is perceived as a “healthy” rate of around 30 baht to the dollar.
Prime Minister Yingluck Shinawatra said that it was “a major problem for the export sector” and state agencies must address the issue and “try their best” to settle it, hinting at the central bank that so far has refused to lower interest rates in order to curb foreign fund inflows, which are one of the reasons for the baht’s rally.
Thailand’s Finance Minister Kittirat Na-Ranong has repeatedly asked the central bank governor to take action and to lower the current rate of 2.75 per cent.
Phanupong Nithiprapa, dean of economics at Thammasat University, said that if the currency continues to appreciate, the Bank of Thailand’s monetary policy committee should call an urgent meeting to discuss the problem, rather than wait until its next regular meeting scheduled for May 29.
He said that said the policy committee should consider lowering the repurchase rate to 2.50 per cent to slow the massive inflow of foreign direct investment.
Thai Chamber of Commerce said that export-oriented manufacturers, especially in the service, electronics, agriculture and food sectors, have already been affected by the baht’s persistent appreciation, which makes their exports more expensive and less competitive.
Altogether, 98 companies shut down in the first quarter of 2012, one fifth of them blaming the strong baht for problems in business.
However, the talks about possible measures to rein in the baht’s appreciation have led to a slight relief in the past days. The baht stood at 28.80 to the dollar on April 24. The euro, under pressure due to the debt problems in the euro zone, has sled from around 40.50 baht in February 2013 to below 37 baht at the beginning of April and is currently hovering around 37.50 baht.
The Thai government, domestic economists and export associations have expressed deep concern about the continued appreciation of the country's currency, which is now predicted to hit 27 baht per dollar, far stronger than what is perceived as a "healthy" rate of around 30 baht to the dollar. Prime Minister Yingluck Shinawatra said that it was "a major problem for the export sector" and state agencies must address the issue and "try their best" to settle it, hinting at the central bank that so far has refused to lower interest rates in order to curb foreign fund inflows, which are one of...
The Thai government, domestic economists and export associations have expressed deep concern about the continued appreciation of the country’s currency, which is now predicted to hit 27 baht per dollar, far stronger than what is perceived as a “healthy” rate of around 30 baht to the dollar.
Prime Minister Yingluck Shinawatra said that it was “a major problem for the export sector” and state agencies must address the issue and “try their best” to settle it, hinting at the central bank that so far has refused to lower interest rates in order to curb foreign fund inflows, which are one of the reasons for the baht’s rally.
Thailand’s Finance Minister Kittirat Na-Ranong has repeatedly asked the central bank governor to take action and to lower the current rate of 2.75 per cent.
Phanupong Nithiprapa, dean of economics at Thammasat University, said that if the currency continues to appreciate, the Bank of Thailand’s monetary policy committee should call an urgent meeting to discuss the problem, rather than wait until its next regular meeting scheduled for May 29.
He said that said the policy committee should consider lowering the repurchase rate to 2.50 per cent to slow the massive inflow of foreign direct investment.
Thai Chamber of Commerce said that export-oriented manufacturers, especially in the service, electronics, agriculture and food sectors, have already been affected by the baht’s persistent appreciation, which makes their exports more expensive and less competitive.
Altogether, 98 companies shut down in the first quarter of 2012, one fifth of them blaming the strong baht for problems in business.
However, the talks about possible measures to rein in the baht’s appreciation have led to a slight relief in the past days. The baht stood at 28.80 to the dollar on April 24. The euro, under pressure due to the debt problems in the euro zone, has sled from around 40.50 baht in February 2013 to below 37 baht at the beginning of April and is currently hovering around 37.50 baht.
