Exporters to Bank of Thailand: Stop the rising baht

Baht 29.75 against US dollar means more dollars for baht, more valuable baht, more expensive & less competitive Thai exports.

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Economics

BoT urged to weaken rising baht

Big-business coalition cites harm to exports
Piyachart Maikaew
5 Feb 2013

The private sector is stepping up its pressure on the Bank of Thailand to ease the baht's strength, saying the central bank should look at the possibility of an interest rate cut and tax measures to cope with foreign capital inflows.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), which comprises the Federation of Thai Industries (FTI), the Thai Chamber of Commerce and the Thai Bankers' Association, met yesterday to discuss the impact of the strong baht, which was quoted yesterday at 29.75 baht against the US dollar.

JSCCIB chairman Payungsak Chartsuthipol said strong foreign capital inflows had strengthened the baht and short-term fluctuations had adversely affected exporters.

Mr Payungsak, also the FTI chairman, said the committee will meet with the Commerce Ministry this week to discuss ways to maintain the competitiveness of exports. 

"We understand that the Bank of Thailand has monetary measures to oversee the currency's movements but needs to minimise impacts on the overall economy. All we want is to have the baht move in line with its peers in Southeast Asia and four other countries in the region," he said, referring to China, India, Bangladesh and Sri Lanka. 

The baht has appreciated continuously against the dollar since the start of the year as the second-strongest currency in the region after the Malaysian ringgit, he added. 

Central bank senior economist Songtham Pinto said it has monitored the baht closely so that it is prepared to take necessary actions.

The bank found that capital inflows reflected both international trade and investors' short-term daily movements. 

Mr Songtham said the interest rate is not the only factor that could draw short-term foreign capital inflows. Investors would shift funds to arbitrage interest rate differentials, foreign exchange gaps and stronger economy prospects.

"In Taiwan, for example, its central bank reduced the interest rate significantly in the past, yet it continues to attract capital inflows," he said. 

Foreign capital inflows have not spurred inflation so far, although the consumer price index spiked to a 10-year high in January.

The increase in the Stock Exchange of Thailand index and the domestic economy in general have not been high enough to push up inflation, Mr Songtham. said.

The central bank is maintaining its inflation forecast at 2.8 % this year.

Pongsak Assakul, chairman of Thai Chamber of Commerce, said small exporters have been particularly affected by the baht's fluctuations.

Thai Bankers's Association president Chartsiri Sophonpanich said all commercial banks will try to look after their export-oriented customers and advise them to use financial measures to cope with currency movements.

(Source: Bangkok Post, Economics, BoT urged to weaken rising baht, Big-business coalition cites harm to exports, Piyachart Maikaew, 5 Feb 2013, link


appreciate (verb) - when currency increases in value (compared to other currencies, making exports more expensive and less competitive than other countries) 
appreciated continuously - to go up in value without stopping
the baht has appreciated continuously against the dollar since the start of the year

currency - a widely used the money accepted for exchange of goods in an economy เงินตรา (See Wikipedia)
the baht is the second-strongest currency in the region

appreciation (noun) - when a currency is increasing in value
baht appreciation

rising baht - Same as "baht appreciation" when the baht is increasing in value

strong baht - when the baht has appreciated and risen in value compared to other currencies
the strong baht, which was quoted yesterday at 29.75 baht against the US dollar.

weak baht -
when the baht has depreciated and fallen in value compared to other currencies
weaken rising baht

ease - to make or become less severe, difficult, unpleasant, painful, etc บรรเทา ทำให้ง่าย
ease the baht's strength

inflation - the level of prices rising in the economy as a whole ภาวะเงินเฟ้อ

forecast - what experts believe will happen in the future พยากรณ์
inflation forecast

the central bank is maintaining its inflation forecast at 2.8 % this year.

spurred - caused ก่อให้เกิด
spurred inflation - caused inflation
foreign capital inflows
have not spurred inflation so far

consumer - someone who buys and uses goods and services ผู้บริโภค
consumer price index (CPI) - a measure of inflation that consumers and households face over time
the consumer price index spiked to a 10-year high

urged - ask, request or advise strongly what action to take วิงวอน
BoT urged to weaken rising baht

coalition - when several groups join together to form a larger group การร่วมกัน,การร่วมมือกัน,สัมพันธมิตร
big-business coalition

harm - damage ความเสียหาย
harm to exports

cite - mention something; use some fact to support the argument you are making in writing or speech
big-business coalition cites harm to exports

sector - a part of a country's economy or business activity ภาคเศรษฐกิจของประเทศ
private sector - all the privately-owned businesses in a country

pressure - when people are being pushed or forced to so something; trying to force someone to do something  ความกดดัน
stepping up its pressure

The private sector is stepping up its pressure on the Bank of Thailand to ease the baht's strength,

interest rate - the fee for borrowing money; the percentage of a loan that has to be paid each year for a loan

capital - investment money; money invested in businesses (stocks & debt such as loans & bonds) 
capital inflows - investment money coming into a country

foreign capital inflows - investment money coming into a country from other countries
short-term foreign capital inflows

cope with - deal with a problem sucessfully; to deal successfully with a difficult situation รับมือกับ
cope with foreign capital inflows

measures - actions taken to deal with a problem มาตราการ
tax measures - changing taxes to solve a problem (by changing the economic behaviour of companies and people)
tax measures to cope with foreign capital inflows

the central bank should look at the possibility of an interest rate cut and tax measures to cope with foreign capital inflows.

X comprises Y, Z, .... - X is made up of parts Y, Z, ..... 
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), which comprises the Federation of Thai Industries (FTI), the Thai Chamber of Commerce and the Thai Bankers' Association

impact - an effect or influence ผลกระทบ
discuss the impact of the strong baht, which was quoted yesterday at 29.75 baht against the US dollar.

fluctuation - when the value of something goes up and down ความผันผวน, การผันแปร
short-term fluctuations
short-term fluctuations had adversely affected exporters.

JSCCIB chairman Payungsak Chartsuthipol said strong foreign capital inflows had strengthened the baht and short-term fluctuations had adversely affected exporters.

maintain - to keep;  keep in good condition รักษา
competitiveness - how well a business can do compared to other firms (does it have lower price or higher quality?) การแข่งขัน

maintain competitiveness
maintain the competitiveness of exports

Mr Payungsak, also the FTI chairman, said the committee will meet with the Commerce Ministry this week to discuss ways to maintain the competitiveness of exports.

oversee - manage, check to see if project is going ok; watch or organise a job or an activity to make certain that it is being done correctly คุมงาน,ควบคุม จัดการ ดูแล
oversee the currency's movements

monetary measures - using monetary policy to solve economic problems (such as keeping the value of the baht down so exports stay cheap)
monetary measures to oversee the currency's movements

minimise - to reduce something harmful or unpleasant to the smallest amount or degree ลดจำนวนลง, ลดให้เหลือน้อยที่สุด
minimise impacts on the overall economy

"We understand that the Bank of Thailand has monetary measures to oversee the currency's movements but needs to minimise impacts on the overall economy.

peers - people or organisations at the same level and position but in a different place เพื่อนร่ีวมสาขาอาชีพ
the baht's peers in Southeast Asia

move in the line with - following,  moving in the same direction by the same amount
have the baht move in the line with its peers in Southeast Asia

All we want is to have the baht move in the line with its peers in Southeast Asia and four other countries in the region," he said, referring to China, India, Bangladesh and Sri Lanka. 

monitored - watch carefully what is happening, to make sure everything goes well เฝ้าระวัง
monitored closely
monitored the baht closely

take necessary actions

prepared to take necessary actions

Central bank senior economist Songtham Pinto said it has monitored the baht closely so that it is prepared to take necessary actions.

international - between countries ระหว่างประเทศ
trade - the buying and selling of goods การค้าขาย
international trade - the buying and selling of goods between countries

The bank found that capital inflows reflected both international trade and investors' short-term daily movements. 

prospects - the possibility that things will happen, especially something good ความเป็นไปได้



draw  - cause to come or flow into a place (example: accidents draw onlookers to the accident scene)
draw short-term foreign capital inflows

factor - a fact or situation which influences the result of something ปัจจัย
the interest rate is not the only factor that could draw short-term foreign capital inflows

shift - to transfer; to move from one place to another เคลื่อนย้าย
funds - money in bank accounts เงินทุน
shift funds - move money from one to another place

interest rate -
differential -
the difference between two amounts
interest rate differentials

arbitrage - buying in one market and selling in another to make a profit (by exploiting differences in markets)
arbitrage interest rate differentials

foreign exchange
gaps

foreign exchange gaps
arbitrage foreign exchange gaps

prospects
stronger economy prospects
arbitrage stronger economy prospects

Investors would shift funds to arbitrage interest rate differentials, foreign exchange gaps and stronger economy prospects.

significantly - in an important way อย่างสำคัญ
reduce significantly
reduced the interest rate significantly

attract - to cause someone to be interested in something ดึงดูดความสนใจ
attract capital inflows

Taiwan's central bank reduced the interest rate significantly in the past, yet it continues to attract capital inflows

spike - increase quickly by a large amount
the consumer price index spiked to a 10-year high

Foreign capital inflows have not spurred inflation so far, although the consumer price index spiked to a 10-year high in January.

stock index - a measure of how the average price of a group of stocks is moving
Stock Exchange of Thailand index
- SET index

domestic - within the country ภายในประเทศ
the domestic economy - the economy of a country (such as Thailand, China, the US, etc)
the international economy

in general
the domestic economy in general

The increase in the Stock Exchange of Thailand index and the domestic economy in general have not been high enough to push up inflation, Mr Songtham. said 

fluctuations
the baht's fluctuations
Pongsak Assakul, chairman of Thai Chamber of Commerce, said small exporters have been particularly affected by the baht's fluctuations.

commercial - for business purposes
commercial bank - a bank with branches in many different places, that provides a range of services, especially related to current accounts, loans and saving money, for people and businesses  (See Wikipedia)
http://en.wikipedia.org/wiki/Commercial_bank

oriented - mainly concerned with or directed towards
export-oriented - related to exports 
export-oriented customers - customers who do exports as a business

Thai Bankers's Association president Chartsiri Sophonpanich said all commercial banks will try to look after their export-oriented customers and advise them to use financial measures to cope with currency movements.

About the author

columnist
Writer: Jon Fernquest
Position: Online Writer