PM: Trade in US dollars
Boosting capital outflows is target
Prime Minister Prayut Chan-o-cha has called for the nation to spend in US dollar terms to increase capital outflows and weaken the baht.
"We need to think about how expenditures can be made in dollar terms to boost capital outflows. The country's strong financial position attracts investors to use Thailand to park their money and this has pushed up the baht," he told an audience at the Thailand Responsible Business Network (TRBN) forum.
External factors led to Thailand's higher current account surplus, and hefty foreign reserves contribute to the firmer baht, even as policymakers have addressed many problems to ease the baht's gain, he said.
Bank of Thailand governor Veerathai Santiprabhob recently said the baht is overvalued against the greenback.
The baht is the best performing currency in Asia, rising 7.67% against the US dollar this year, as investors perceive the currency is a safe haven.
According to central bank data, international reserves amounted to US$222.2 billion as of Nov 22.
The stronger baht is dealing a blow on exports, which account for about 70% of the economy, and hampering growth.
Gen Prayut said conventional thinking is of no use as the world is moving into the 5G era, but development must be done in a sustainable way.
The government must brace for Thailand's demographic shift to ensure sustainable development in the future, he said.
Thailand will become an aged society by 2021, with the global economy slowing, disrupted by technology that affects both trade and investment.
The private sector must come up with ways to adopt an ageing workforce appropriately, and workers' skills will be sharpened to keep pace with new industries, said Gen Prayut.
Thailand needs to continue investing in infrastructure, but a balance in development should be the priority, he said.
Ruenvadee Suwanmongkol, secretary-general of the Securities and Exchange Commission, said the SEC, Thai Listed Companies Association and other organisations joined forces to set up TRBN to persuade listed companies to operate business responsibly.