BoT, Finance Ministry wrangle baht

BoT, Finance Ministry wrangle baht

Repairing exports and economy

Although the baht's value is moving in line with regional currencies, the ministry has asked the central bank to take care of its movement. (Photo by Apichart Jinakul)
Although the baht's value is moving in line with regional currencies, the ministry has asked the central bank to take care of its movement. (Photo by Apichart Jinakul)

The Finance Ministry has discussed managing the baht's movements with the Bank of Thailand in a bid to help exporters and recoup the economy amid a tourism slump.

The export sector plays an important role in helping stimulate the economic recovery as the tourism industry remains battered by adverse effects stemming from the pandemic, said Finance Minister Arkhom Termpittayapaisith.

Although the baht's value is moving in line with that of regional currencies, the ministry has asked the central bank to "take care" of the local currency's movement, said Mr Arkhom.

The baht rose as much as 0.8% to 30.195 to the US dollar yesterday, its highest intra-day level since Jan 14, according to data compiled by Bloomberg.

The baht has surged 4.7% this quarter as foreign inflows into Thai stocks and bonds resumed and emerging market currencies rallied on optimism over the global economic outlook, Bloomberg reported.

Overall, the local currency has rebounded almost 9% from this year's low in April and is close to wiping out its entire losses for the year.

The baht's value looks set to strengthen further following the dollar depreciation as Democratic presidential candidate Joe Biden is poised to become the next US president, subsequently lowering downside risks to the global economic growth outlook and prompting funds to seek higher risk assets, said Kasikorn Research Center.

Apart from government stimulus measures to rev up consumer spending, a lower full-year export contraction offers a glimpse of hope for the Thai economy, ravaged by the pandemic crisis, to avoid a full-year contraction of 8%.

Consumer spending may not be sufficient to jump-start the economic engine as other factors, such as exports and tourism, still rely on external developments, said Mr Arkhom.

While tax revenue for fiscal 2020 was lower than expected, Mr Arkhom said the fiscal 2021 budget is sufficient to cover public expenditures and the Finance Ministry has prepared an emergency loan in case budget expenditure exceeds tax revenue.

A further assessment on tax revenue collection will be made in June next year, he said.

Thailand's full-year GDP is forecast to contract by 7.7% from 8.5% previously projected, according to the Fiscal Policy Office.

The lucrative tourism industry, which directly and indirectly makes up almost 20% of the country's GDP, has been tattered and torn by the unabated pandemic.

Foreign tourist arrivals plunged by 100% year-on-year in September, with zero tourism receipts. For the first nine months, international arrivals plummeted by 77.3% year-on-year, with total foreign tourism receipts arriving at 332 million baht, a far cry from 1.4 trillion logged the corresponding period last year.

Thailand, which had a record 39.8 million tourist arrivals last year, has recorded zero foreign visitors since a travel ban was imposed in April.

Do you like the content of this article?
COMMENT

Philippines protests China’s ‘provocative acts’ in disputed sea

The Philippines has protested “provocative” actions by Chinese government vessels in the South China Sea, in yet another sign of continuing tensions between the two nations in the disputed waters.

20:39

Thailand Post tests parcel delivery by drone

Thailand Post tested drone delivery for the first time on Wednesday with a plan to start delivering medicines to patients difficult to reach by regular mail carriers.

19:56

Myanmar's economic woes due to gross mismanagement since coup - US official

SINGAPORE: Myanmar's economic turmoil is due to political instability and mismanagement following a February coup, a US official said on Wednesday after a junta minister blamed the crisis partly on foreign backers of its opponents.

18:36