The Fiscal Policy Office is confident the Bank of Thailand, which commands monetary policy, is capable of preventing the baht's value fluctuating too much, FPO director-general Somchai Sajjapongse said on Friday.
The baht’s appreciation for two days in a row, to stand at 31.03 baht to the US dollar on Friday morning, was boosted by the political settlement in the US on the federal budget and debt ceiling, he said.
Even though the US problems had not yet been really resolved, as the debt ceiling was extended only to February 2014, this had made global economies feel more comfortable, he added.
Mr Somchai said his office, the Office of the National Economic and Social Development Board and the central bank had assessed the situation and prepared necessary measures to deal with any possible negative consequences caused by capital inflow or outflow.
The conflict settlement in the US might trigger foreign investment inflow to Thailand and strengthen the value of the baht currency, but that was not a problem of concern as the central bank had already prepared any needed measures, he said.
Thailand also has US$170 billion in foreign reserves, sufficient to deal with any possible situation. At this stage the baht is not too strong and there is no need for intervention by the central bank, he said.
Asked about speculation the US Federal Reserve would scale down its quantitative easing measure in the first quarter of next year, Mr Somchai said it would be a good development.
It would show that the US economy is recovering and monetary measures to stimulate economic growth were no longer needed. When the US economy recovers, it would boost Thailand’s exports even as it also triggers a foreign investment outflow, affecting the baht's value, he said.
Mr Somchai also government revenue from tax collection in 2013 fiscal year (Oct 12-Sept 13) totalled 2.15 trillion baht, exceeding the set target by 57.47 billion baht, or 2.7%.
Total tax revenue was up 9.7% from the 2012 fiscal budget (Oct 11-Sept 12), he said.
Revenues collected by other state agencies exceeded the set target by 47.86 billion baht, or 45.7%, and the higher than the set target collections from petroleum concession tax, car excise tax and individual income taxes were reasons behind the success, said Mr Somchai.
Income from tax collections by the Ministry of Finance’s three departments -- excise, revenue and customs – exceeded the target by 9.05 billion baht, he said.
Revenues exceeding the target for the 2013 fiscal year by about 60 billion baht ensured the country has a strong financial position and is capable of supporting economic expansion in the next fiscal year, he said.
The Public Debt Management Office reported on Friday that public debt in August increased by 74.27 billion baht from the previous month.
Outstanding public debt as of Aug 31 totalled 5.30 trillion baht, or 44.63% of gross domestic product (GDP), director-general Chularat Sutheethorn said.
Of the total, 3.67 trillion baht is debt acquired by the government, 1.09 trillion baht is debt from non-financial institution state enterprises, 524.13 billion baht is debt owned by financial institution state enterprises and 834.69 million baht is debt owned by other state agencies, she said.
The government’s debt rose by 37.47 billion baht and debt of non-financial institution state enterprises was up by 32.29 billion baht, the director general said.
The debt of financial institution state enterprises also rose by 4.05 billion baht, she added.
The Bank of Thailand reported that foreign reserves as of Oct 11 totalled US$171.6 billion, a decline of $600 million from the previous week.
The net forward position, reflecting the central bank's status on foreign currency purchases in the futures market, totalled $21.6 billion, up 100 million from the previous week, putting net foreign reserves at $193.2 billion, it said.
Reserves decreased slightly as the BoT could release its US dollar holding to boost liquidity in the money market to ease the burden in holding the green-back note after pressure on capital flow had been eased, as investors were awaiting the outcome of the dispute that led to the US government shutdown, the central bank said.