Firms must heed forex risk | Bangkok Post: business

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Firms must heed forex risk

Central bank adopts hands-off attitude

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The private sector should be more attuned to risk from foreign exchange to minimise the public sector's subsidies in the form of foreign exchange intervention, says an economic forum. 

Using the interest rate as a tool to control inflation has remained the most suitable measure in the local context, but the Bank of Thailand's increase in the policy interest rate has encouraged foreign capital inflow, causing the baht to appreciate rapidly.

The central bank bought US dollars from banks to keep the baht weak but later had to issue bonds to pull back liquidity.

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