BoT gets greenlight to curb baht's appreciation

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BoT gets greenlight to curb baht's appreciation

Published: 9/09/2010 at 04:48 PM
Online news: Economics

Prime Minister Abhisit Vejjajiva said on Thursday he had given the Bank of Thailand guidelines for introducing measures to curb the value of the Thai baht, if necessary.

“I have told the central bank that it can take measures to control the foreign direct investment inflow and outflow to prevent the baht from fluctuating too heavily," said Mr Abhisit.It was possible that the currency would continue to strengthen, but he could not say whether it would reach 29 baht to the US dollar, as speculated.The chairman of the House finance, banking and financial institutions committee, Puea Thai MP for Chiang Mai Surapong Towichakchaikul, on Thursday afternoon called on the government to oversee the baht’s value.Mr Surapong said the baht reached 30.85 baht to the US dollar today.He warned that if no action was taken, the export sector would be severely affected in the fourth quarter of the year.The committee chairman called on Prime Minister Abhisit and Finance Minister Korn Chatikavanij to clearly state what measures would be applied.Bank of Thailand assistant governor Paiboon Kittisrikangwan said the baht’s rise in value has no impact on the economic stability and growth potential.Mr Paiboon said even though the Thai currency continues to strengthen, it will not lead to economic instability or a deterioration of growth as the central bank is capable of managing its value.He said the BoT is duty-bound to ensure that any change in value of the baht would not have an adverse effect on the Thai economy, both short-term and long-term.The central bank will keep a close watch and will assess the impact of the strong baht on the economy, and take into account all related factors.“The BoT will focus on stability of the economy by assessing whether the economy can continue to grow under the changing factors, including changes in the global monetary market and foreign exchange rates,” said Mr Paiboon.Earlier today, Thanawat Polwichai, director of the Economic and Business Forecasting Centre at the University of the Thai Chamber of Commerce, called on the central bank to clearly make known how it would oversee the baht's value.“The BoT should tell the...

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Your comments

wantmymoney

Discussion 11 : 10/09/2010 at 03:12 AM11
I doubt anyone in the thai government or BOT are working for the country, if it did it would not have started the 1997 asian financial crisis. I guess it will happen again, cheap money flowing into thai property and stock market. In 1997 the US was recovering from a recession just like today, its interest rate was very low, japan was in deflation and asean economies are zooming ahead so these funds just keep following into thailand. Thais companies just keep borrowing US$ to pay for their luxuries, sport cars, condos, new buildings etc. The party just had to end and it ended with everyone becoming poor.
Tourism already reeling from airport hijack, reds killing etc and it will be expensive for tourist to come as most hotels charges high irregardless whether they will fill up any rooms at all. Thailand exports will be badly hit and will its medical and freelance tourism industries. Only the elites rich benefits from strong baht, now they can go US for holiday and buy that new Ferrari.
Brian Hudson

Discussion 10 : 10/09/2010 at 12:16 AM10
I use to travel to Thailand 3 times a year but now maybe only one time a year and if the Baht gets stronger I thick one time every 2 years it's sad for the Thai people
Tommy

Discussion 9 : 09/09/2010 at 11:57 PM9
In my opinion someone within the treasury, is making themselves oodles and oodles of money, at
the countrys expense, by keeping the bht so strong... Why else do it? The export market is already beginning to suffer and foreigners are going on holiday to other sunny climates, where their money goes a lot farther!

Somebodys cashing in..But who???
Sterling

Discussion 8 : 09/09/2010 at 09:30 PM8
Introduce a Tax,special measures?A bit of political unrest,few demonstrations,more bombs and throw in some bias reporting from Foreign Media and that should wipe off a couple of Baht off the Exchange Rate.
This Gusted

Discussion 7 : 09/09/2010 at 09:08 PM7
Abhisit has given the Bank of Thailand "guidelines for introducing measures to curb the value of Thai baht".

â€œI have told the central bank that it can take measures to control the foreign direct investment inflow and outflow to prevent the baht from fluctuating too heavily," said Mr Abhisit.

This suggests that the PM - like Thaksin - does not know of - or simply disrespects - the independent status of the BoT.

In 2001, one of Thaksin's first offences was to replace the BoT governor, although he didn't have the legal power to do so.
zeitgeist

Discussion 6 : 09/09/2010 at 09:05 PM6
P#1
The Chinese were given the key a long time ago. I can't count the number of Thais that I have met thet say they are half Chinese and never been there. If that's how it works, I'm Chinese because I've been there twice.
Pointman #2

Discussion 5 : 09/09/2010 at 08:38 PM5
I recently predicted the Thai Baht would reach 29 Thai Baht to the US Dollar.

My prediction was based on the latest export/import figures for Thailand, current accounts and Thai politcal relations with the USA.
BobNYC

Discussion 4 : 09/09/2010 at 07:40 PM4
If I didn't have a non-refundable plane ticket, I would not be spending 2 weeks in Thailand this year. And I doubt I'll be back with the baht as it is. I remember when the exchange rate was 4400B, its now 3051. That is not sustainable for me to visit the Thailand I love. And my retirement money will likely not be spent here. *sad*
curbed

Discussion 3 : 09/09/2010 at 07:09 PM3
"curb foreign capital"?? Foreign investment are already feeling the heat. It Starts when you arrive on the airport and are robbed by the police.
jdog

Discussion 2 : 09/09/2010 at 06:43 PM2
The safest thing for foreign investors in Thailand is not to invest; You're sure to be scammed.