Related Articles

Thai currency strongest in Asean

by Duangkamol Buranasomphop

 



Thai currency strongest

The Thai currency strengthened to almost 29.70 baht to the dollar, an increase of 2.8% since the beginning of this year. The baht is now the strongest currency in the Association of Southeast Asian Nations (Asean), followed by Malaysia’s ringgit, the Exim Bank said.

Exim Bank president Kanit Sukonthaman said on Thursday that the substantial appreciation in the value of the Thai currency would increase risks for Thai manufacturers.

Finance Minister Kittiratt Na-Ranong said the current appreciation of the baht was a cause of concern as it would severely affect Thai exporters.

Mr Kittiratt, deputy prime minister for economic matters, said the current strong baht value did not reflect real demand for the Thai currency and that the Bank of Thailand (BoT) would have to step in to curb the short-term baht fluctuation and the rapid inflow and outflow of foreign investment capital.

He said the government would come up with measures to ensure that the demand for the baht and the United States currency would be in balance. It would not interfere in the money market to distort the market mechanism.

The minister said the government would instead encourage Thai investors to increase investment overseas, and would also speed up investment in its two-trillion-baht infrastructure development mega-projects


.Thai currency strongest


 

In addition, the government would push ahead with call-in bids for its 350 billion baht water resource management and flood control projects, which would in turn help minimise the demand for the US dollar and ease the pressure on the baht.

Democrat Party leader and former premier Abhisit Vejjajiva said the continuing appreciation of the baht would definitely hurt the export sector.

The opposition leader in parliament suggested that no clear target be set on the baht's value. Instead, the Ministry of Finance and the central bank should work closely to prevent the baht from heavily fluctuating.

 

He said the export sector had been affected by the global economic crises, including the fragile US economy and the persistent European debt problem.

BoT governor Prasarn Trairatvorakul said the baht's value compared to the US dollar had sharply fluctuated over the past two days due to more foreign investment inflow to the country’s bond market.

This signalled that foreign investors were looking for short-term profits from their investment in Thai capital markets, he added.

“The central bank is now keeping a close watch on the capital inflow situation. It is not unusual that the baht would become stronger than other currencies in the Asean region,” he said.

Asked whether the the BoT would interfere in the money market to stabilise the Thai currency's value, Mr Prasarn said intervention can be made only to a certain level because it also  has a cost.

What the BoT is intending to do is to ensure that the exchange rates and the baht value would move in line with the market mechanism and the country’s economic fundamentals, he said.

The Bot chief would not comment when asked whether the current appreciation of the baht would affect the country’s 

Content and Picture from:  http://www.bangkokpost.com/news/local/331311/thai-currency-strongest-in-asean

Duangkamol Buranasomphop

ข้อมูลทั่วไปเกี่ยวกับ AEC