Businesses seek action to check rise of baht

Businesses seek action to check rise of baht

Firms worried about shipment losses

A currency exchange booth in Bangkok. The baht has risen higher than its regional peers, igniting concerns among the business community. (Photo by Taweechai Tawatparkorn)
A currency exchange booth in Bangkok. The baht has risen higher than its regional peers, igniting concerns among the business community. (Photo by Taweechai Tawatparkorn)

Business leaders are urging the government to take action over the Thai baht's appreciation before it hurts Thai exports.

Chen Namchaisiri, chairman of the Federation of Thai Industries (FTI), said the strong baht is becoming a concern for businesses.

Speaking at a meeting of the Joint-Standing Committee on Commerce, Industries and Banking (JSCCIB), Mr Chen said the business sector is calling for government measures to help curb the strength of the currency to prevent it from hurting Thai exports.

The baht has risen by more than 3% so far this year to 34.64 baht against the US dollar, from 35.80 a dollar at the end of 2016, he said.

The appreciation is high when compared with other Asian currencies, including the Malaysian ringgit, which rose only 1.2%, the Chinese yuan at 0.7% and the Singapore dollar at 3%, he added.

"At this stage, we hope the government will monitor the baht closely and issues measures to help solve problems immediately if needed," said Mr Chen, adding that exports account for 70% of Thailand's gross domestic product.

Apart from the baht's appreciation, Mr Chen said the JSCCIB is also concerned about the baht's volatility, since it is widely expected that the US Federal Reserve will raise the US interest rate, which would have a major impact not only on the baht, but also on regional currencies by making them more volatile.

US President Trump has signed two executive orders directing his administration to review the country's trade deficits and clamp down on countries the US perceives as abusing trade rules. Thailand is one of 16 countries, alongside Indonesia, France, Canada and India.

According to the Customs Department, trade value between Thailand and the US was worth around US$37 billion annually over the past four years. Thai exports to the US in 2015 and 2016 were valued at $23.6 billion and $24.3 billion, respectively.

The Commerce Ministry reported that Thailand's exports fell by 2.8% year-on-year in February to $18.5 billion after rising 8.8% in January and 6.2% in December 2016.

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