Exporters call for stable baht

Exporters call for stable baht

Business leaders are concerned the European Central Bank's move to stimulate Europe's economy will make the baht stronger and adversely affect Thai exporters.

Businesses are urging the Bank of Thailand to stabilise the baht in order to increase their export competitiveness. The baht yesterday moved within a range of 32.63/65 to the US dollar. REUTERS

On Tuesday, they asked the Bank of Thailand to step in to stabilise the baht so it would be less volatile and stay at a level that could give a competitive advantage to exporters.

Boontak Wangcharoen, chairman of the Thai Bankers' Association, said Europe's quantitative easing (QE) to pour more money into the market could prompt capital inflows in emerging markets including Thailand and make the baht stronger.

"Exporters are now worried about the strengthening baht hurting their business," he said.

"The baht is too volatile, and we want the central bank to help stabilise the currency to stay at a level that makes us compete well with other countries."

The export sector accounts for 70% of Thai GDP.

The Thai Chamber of Commerce (TCC) has also voiced its concerns to the government and the Bank of Thailand.

Speaking at a meeting of the Joint Committee on Commerce, Industry and Banking (JCCIB), TCC chairman Isara Vongkusolkit said the rising baht had already affected export sectors and was poised to hurt the overall economy.

"The JCCIB wants the central bank to help balance the currency and monitor it closely," he said.

Exports last year dropped by 0.41% from 2013 to US$228 billion, the second straight year of decline after shipments fell 0.3% in 2013, according to Commerce Ministry data.

Apart from Europe's QE measures, several risks lie ahead that could damage Thai exports this year such as the weakening rouble cutting the number of Russian tourists and last month's expiry of tariff privileges for Thai exports under the EU's Generalised System of Preferences.

"The JCCIB plans to monitor this issue closely," Mr Isara said.

"However, we want the Bank of Thailand to formulate a strategy supporting the business side."

The committee has floated an idea to collect a tax on small and medium-sized enterprises (SMEs) to raise funds that would be spent on supporting small companies if they are hit by unexpected risks in the future.

"The JCCIB agrees collecting tax on SMEs would make it easier for the government to lend a helping hand to SMEs in the future," committee chairman Supant Mongkolsuthee said, adding that the tax would be levied at a progressive rate.

According to the proposal, SMEs earning less than 50 million baht of revenue a year would pay 5% tax, 50-100 million baht would pay 10% tax, and then up to 200 million baht would pay 15% tax.

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