Thailand's central bank is still worried about speculation in the baht and has tools to handle it, a senior official said on Wednesday, as June exports fell and the current account turned to surplus.
The Thai currency has stayed strong despite recent measures to slow fund inflows from abroad.
The central bank, however, will let the baht follow market forces, Don Nakornthab, a senior director of the Bank of Thailand (BoT), told a news briefing.
"Increased volatility in the baht is also a good thing, as low volatility made people bring more money in, and turning us into a safe haven," he said.
Driven by capital inflows, the baht has strengthened about 5.9% against the dollar so far this year, becoming the best performing currency in Asia.
The baht's strength is threatening Thailand's trade-driven economy, which is already under pressure from slowing global demand.
Mr Don said exports might contract this year.
In a bid to ease upward pressure on the baht, the central bank earlier this month issued measures against speculative fund inflows and said it was ready to use additional tools if speculation persisted.
The BoT also cut its supply of short-term bonds at auctions this month and next month.
After a brief pullback following the measures, the baht has firmed this week.
Mr Don also said the central bank expects to introduce measures to tackle household debt late this year, but the details have not finalised yet.
The central bank has repeatedly expressed concerns about elevated household debt, currently at about 80% of gross domestic product and among the highest in Asia. High debt has been a factoring thwarting interest rate cuts.
The BoT left its benchmark interest rate unchanged at 1.75% in June, for a fourth straight meeting, after raising it in December for the first time since 2011.
It will next review policy on Aug 7, when most economists expect no policy change.
The country’s current account showed a surplus of $3.92 billion in June, after May's deficit of $0.38 billion, the BoT said on Wednesday.
June exports declined 2.1% from a year earlier, after falling 7.2% in May.
Imports in June contracted 9.6% from a year earlier, after easing 0.2% in May.
The June trade surplus was $4.4 billion, compared with May's surplus of $1.4 billion.
Private consumption in June was down 0.1% from the previous month, while private investment fell 0.9%.
Last week, the Commerce Ministry reported that Thailand's overall exports in the first half fell by 2.9% year-on-year to US$113 billion. The trade surplus for the period amounted to $3.94 billion.
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