Suriya promises to boost exports but keep hands off baht
published : 13 Aug 2019 at 18:10
The strong baht remains a problem for Thailand's industries and exports, a key driver of the country's growth, and more will be done to help exporters, the industry minister said on Tuesday.
The ministry will support exporters in currency hedging and will discuss measures to promote investment and imports of machines, Industry Minister Suriya Jungrungreangkit told reporters after meeting with the central bank governor.
The baht's strength has been driven by Thailand's high current account surplus of $17 billion this year and the central bank has already acted on the currency's appreciation, he said.
"I just knew that today. Previously, I just heard that the baht was strong because of our high interest rate and foreign investors parking money in our country," Mr Suriya said, referring to the current account surplus.
"The central bank said it has already acted on the baht's strength, but it needs to be careful in doing so, or Thailand will be seen as a currency manipulator for trade advantage."
The baht is Asia's best performing currency, up around 5.5% against the dollar so far this year.
Earlier on Tuesday, Bank of Thailand Governor Veerathai Santiprabhob said the central bank was still concerned about financial stability after last week's interest rate cut.
He added that a new joint policy committee would have no impact on the central bank's monetary decisions.
"We still give importance to financial stability and will need to adopt measures to take care of it, particularly at a time of lower interest rates," Mr Veerathai said without giving further details.
Last week, the Bank of Thailand's monetary policy committee unexpectedly voted 5-2 to cut the key interest rate by a quarter point to 1.50%. Two dissenters favoured no policy change.
Mr Veerathai said the rate cut was due to the increasing impact of escalating trade protectionism on Thailand's trade-driven economy and on lower fuel prices that could pull inflation below target this year.
He also said the establishment of the committee to discuss fiscal and monetary policy will have no impact on the central bank's decision-making as it will only serve as an advisory council.
Finance Minister Uttama Savanayana said on Friday there will be no interference in the central bank's policy.