Keeping the baht exchange rate at an appropriate level will be among the key issues on the agenda when senior officials of the Ministry of Finance and the Bank of Thailand meet next week, says Deputy Finance Minister Paopoom Rojanasakul.
“The local currency is more volatile against the greenback than the currencies of our regional peers, particularly our trading competitors,” Mr Paopoom said on Thursday.
The discussions will also cover the economic outlook and the framework for managing inflation, he said.
“We need to sit down and discuss these issues because we cannot allow the currency to continue appreciating, as it is affecting the country’s exports and tourism,” said Mr Paopoom.
He said the baht had risen quickly and become volatile, strengthening from 36 baht per dollar to 33 and beyond, marking a 10% increase, which is concerning.
Commenting on how much more the baht might appreciate if left unchecked, Mr Paopoom said it largely depends on global financial trends.
Interest rates are being cut in various regions of the world, which has contributed to the baht’s appreciation, he said. If no action is taken locally, it could send a negative signal, said Mr Paopoom.
“Thailand’s monetary policy needs to align with global financial trends, as we are not isolated from the [rest of the] world,” he said.
“If our monetary policy is misaligned with other nations’ policies, we will not be able to address the baht’s volatility. We are an open economy, not a closed one. Issues such as economic geography and monetary policy are crucial.”