Despite measures proposed by the private sector and repeated calls to ease the pace of the baht, no concrete solution is forthcoming.
Bank of Thailand governor Prasarn Trairatvorakul and the cabinet had a discussion yesterday on the strong baht.
Mr Prasarn said the meeting shared information and heard suggested measures to curb the baht.
He said there was no request or pressure from the government for the Monetary Policy Committee (MPC) to cut the policy rate to weaken the baht.
"This was a good discussion, as we shared information on the Thai and world economies that will be used in considering the policy interest rate at the next meeting of the MPC and the central bank," said Mr Prasarn.
MPC member Narongchai Akarasanee yesterday said there would be no sideline meeting of the MPC prior to May 29, when it is scheduled to decide on the policy rate.
"The exchange rate problem has nothing to do with interest rates, and the four capital control measures proposed by the central bank should be able to tame the capital inflows, which are the main cause of the baht gains at present. The point is we must implement the right measure at the right time," said Mr Narongchai.
Tawatchai Yongkittikul said the proposals of the private sector are reasonable, as they do not involve setting up a relief fund as reported earlier.
The private sector only wants the government to help ease some rules on currency hedging to encourage small and medium-sized enterprises to use the tool.
Businesses have also called on the government to come up with long-term measures to ensure the baht's stability, which they see as the key to the country's competitiveness.
At Monday's special meeting with economic policymakers and the central bank governor, firms proposed seven such measures, both short and long term.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong presented their proposals to the cabinet yesterday for acknowledgement and consideration.
Among the proposed measures is the use of the baht as a main currency in regional trade over the long term and dealing with labour shortages more quickly, especially concerning vocational graduates, said deputy government spokesman Parkdehans Himathongkom.
The baht traded at 29.62/68 to the US dollar at 5pm yesterday from 29.67/69 on Monday.
About the author
- Writer: Chatrudee Theparat
Position: Business Reporter