The Finance Ministry will set up a venture capital fund as a way to alleviate the impact of baht appreciation on small and mid-sized enterprises (SMEs).
Under the soon-to-be-set-up fund, venture capital will be used to infuse SMEs whose competitiveness has been hurt by the stronger baht, Somchai Sujjapongse, director-general of the Fiscal Policy Office, said yesterday.
The ministry has set goals not only to sharpen these SMEs' competitiveness, but also push them to list on the Thai stock exchange or expand their business overseas.
The baht, the best performer among Asian currencies this year, reached 28.88 to the US dollar on Wednesday, its strongest level since devaluation in July 1997, on continuing capital inflows resulting from monetary easing by the US Federal Reserve, the European Central Bank and the Bank of Japan.
The baht yesterday fell for the first time in more than a week to 29.02/04 amid concern that the central bank will intervene to slow the pace of appreciation and protect exports.
To avert a repeat failure of venture capital in Thailand as in the past, the Finance Ministry will analyse problems and study Japan's VC model to find out why it succeeds.
In related news, the Bank of Thailand has asked domestic financial institutions to provide information about investment by foreign finance clients to track the movement of foreign capital inflows.
Pongpen Ruengvirayudh, a central bank deputy governor, said the purpose is to gain details about transactions by foreign investors in the local bond market, as it has been the main destination of foreign capital.
Several institutions have received the request. The central bank is assessing speculation by foreign investors in the bond market and may ask for information on a regular basis, said Mrs Pongpen.
Mr Somchai has repeatedly urged the central bank to slash the policy rate as a means of discouraging foreign investors from pursuing arbitrage based on the difference between foreign and local interest rates.
Earlier this month, the Bank of Thailand's Monetary Policy Committee kept the benchmark rate at 2.75% for a fourth straight meeting, despite pressure from the Finance Ministry.