Shippers seek baht management

Shippers seek baht management

Firmer currency will incur forex risks

The Thai National Shippers' Council (TNSC) is urging financial authorities to manage the local currency's value to hover around 31 baht against the US dollar for trade competitiveness.

The baht has appreciated to 30.3 against the greenback and there is a tendency that the local currency's value could further strengthen to 29.5 next year, said Ghanyapad Tantipipatpong, TNSC's chairwoman, citing analysts' views.

If this holds true, the firmer baht would incur foreign exchange risks in terms of the cost and selling price of goods, said Ms Ghanyapad.

It was reported that Ms Ghanyapad also had a meeting with Bank of Thailand governor Sethaput Suthiwartnarueput to ask the central bank to manage the movement of the local currency.

Previously, the TNSC assessed that the value of the baht should be 34 per dollar, a level seen appropriate for trade competitiveness.

However, the council can now tolerate a foreign exchange value of 31 baht against the US currency.

The baht's value has appreciated at a rapid pace compared with other currencies, she said.

The rapid appreciation followed investors' risk-on sentiment on the back of the US presidential election outcome and progress in Covid-19 vaccine development.

The baht has been the second-best performer in Asia this month after foreign investors turned net buyers of almost US$2.4 billion (72.8 billion baht) of bonds and stocks as appetite returns for riskier emerging-market assets amid a weak dollar, Bloomberg reported.

Vachira Arromdee, assistant governor for financial markets operations group at the Bank of Thailand, recently said the rapid appreciation of the baht may affect the fragile recovery of the Thai economy, and the central bank had been closely monitoring and intervening in the market as necessary to limit excessive currency volatility.

The central bank has liberalised foreign currency deposits and increased the investment limit in foreign securities for Thai individual investors, an attempt to curb the baht's strengthening value and forge a new foreign exchange dynamic.

But the move has produced a minor effect as the baht's value has slightly depreciated, with a limited movement seen, said Ms Ghanyapad.

Ms Ghanyapad on Tuesday had also a meeting with Finance Minister Arkhom Termpittayapaisith to discuss policies to stem the baht's strengthening value and measures to shore up consumer purchasing power.

She urged Mr Arkhom to expedite the linkage of electronic licence information, or the "National Single Window" project, to enhance the transfer of information between the public and private sectors.

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