The Federation of Thai Industries (FTI) has made recommendations to the Bank of Thailand to ease the impact of the strong baht on the private sector.
FTI vice-chairman Chen Numchaisiri said it would hold talks with the central bank about the baht next week.
"We call on the central bank to take aggressive action to tackle baht appreciation, as its value has jumped 3.13% against the dollar since Dec 21 last year, making it the strongest currency in Asia after the yen," he said.
Under the FTI proposals, the central bank should split the reserve account - part for foreign direct investments and part for short-term capital inflows.
Moreover, the FTI would like to see commercial banks assist small and medium enterprises (SMEs) by reducing or exempting fees for money exchange and forex derivatives.
"We understand the central bank has removed the ceiling on foreign currency deposits (FCD) since last October to allow easier foreign exchange risk management. However, most SMEs are not aware of this," he said.
In the past, the Bank of Thailand limited the number of days exporters could hold dollar incomes before they had to change them into baht. The rule was eased and eventually scrapped to ease pressure on the currency.
The FTI also recommended the Board of Investment (BoI) should come up with incentives for Thai enterprises to invest overseas. The government, meanwhile, should speed up spending on infrastructure mega projects so the increased capital outflows will help stabilise the Thai currency.
Kan Trakulhoon, president and chief executive of Siam Cement Group (SCG), said the baht's value is likely to continue the upward trend following two months of appreciation. This is because massive liquidity in the global market will continue to flow into Asia where the economy is expanding.
As a net exporter, SCG realises the impact of the strong baht. The group's bottom line is affected by 600-700 million baht as the baht has appreciated by around one baht against the dollar since the beginning of this year, he said.
"Many Asian currencies have also appreciated and the Thai baht is one of the strongest," he said.
"Now the baht has become slightly stronger. I believe the central bank will further monitor the current movement and manage it appropriately," he added.
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Writer: Piyachart Maikaew and Nareerat Wiriyapong