Interview: Bank of Thailand worried about strong baht

Interview: Bank of Thailand worried about strong baht

Veerathai Santiprabhob: Central bank ready to intervene if baht gains too much. (Bangkok Post file photo)
Veerathai Santiprabhob: Central bank ready to intervene if baht gains too much. (Bangkok Post file photo)

The Bank of Thailand remains worried about a strong baht and short-term capital inflows, the governor said on Monday, as the currency traded near its highest against the dollar in more than 22 months.

The central bank is ready to act on any excessive moves in the baht, Veerathai Santiprabhob told a seminar.

"If there are large fund inflows, and causing high volatility in the baht, it's the central bank's duty to act on it with instruments available," Mr Veerathai said.

The baht had gained more than other currencies over the past week, the governor said, because analysts interpreted a monetary policy committee statement on May 24 to mean the central bank was unconcerned about the baht's strength.

That was wrong, he said .

"We are still worried about the baht's strength and short-term fund inflows parking in Thailand," Mr Veerathai said.

But except for the past week, the baht has been moving in line with regional currencies since the start of the year, he said. The baht traded at 34.12 per dollar on Monday, after reaching 34.04 on Friday, its highest in more than 22 months.

Mr Veerathai said a weaker dollar and a clear recovery in the Thai economy were also factors in the baht's appreciation.

The private sector should hedge against currency risks as high volatility in global financial markets will continue, he said, adding more than 60% of Thai exporters did not hedge.

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