Prime Minister Yingluck Shinawatra has reiterated her concerns about the surging baht saying that the government will work quickly to ease the impacts of the currency's rise on the private sector.
The premier was responding to Federation of Thai Industries (FTI) chairman Payungsak Chartsuthipol, who met her at Government House yesterday. He asked Ms Yingluck to act urgently to deal with the baht's appreciation.
She said the government will assign agencies to consider the FTI's requests, while the government has implemented various policies to stabilise the currency including speeding up investment, promoting baht borrowing, and setting a requirement for state enterprises to pay foreign debts ahead of schedule.
Mr Payungsak called on the government to implement measures to deal with the rising baht urgently, not to wait for the meeting of the Monetary Policy Committee (MPC) on May 29.
He said the baht is expected to strengthen further next week, after the European Central Bank slashed its benchmark interest rate by 25 basis points to an all-time low of 0.5% on Thursday.
He said the strong baht could destroy the supply chain of domestic industry because manufacturers have already turned to importing raw materials and parts instead of using local supplies.
"The FTI doesn't want the government to make the baht depreciate, but we want its value to be in line with the levels of our trading competitors in the region," Mr Payungsak said.
"We are very worried the strong baht will continue and adversely affect exporters in the second and third quarter." He said many exporters had delayed receiving orders from customers due to concerns over further baht appreciation.
Export growth this year will fall to 4-5% from the 8-9% target, Mr Payungsak said, proposing the MPC cut its policy interest rate by 1% point from the current 2.75%.
The baht has appreciated by 6.28% since early this year, compared with 0.27% for the Malaysian ringgit and 0.69% for the Indonesian rupiah, while the Japanese yen has depreciated 15%, the South Korean won weakened by 5%, and the Vietnamese dong appreciated by 0.7%, the FTI chairman said.
Mr Payungsak said the FTI will meet in the next week or two to discuss what action to take if the government fails to draw up any measures.
Democrat MP and former finance minister Korn Chatikavanij said the BoT should explain the heavy losses on its balance sheet to prevent the information being "twisted" to discredit the central bank governor.
On his Facebook page, Mr Korn said the government was out to attack the BoT by citing the "losses" from holding the dollars it bought which are now worth less against the strong baht than when they were purchased. The BoT bought the dollars to manage the baht value.
Mr Korn added that Veerathai Santiprabhob, a former chief strategy officer at the Stock Exchange of Thailand, has said the losses, put at 800 billion baht, account for an almost negligible fraction of the national budget.
Opposition leader Abhisit Vejjajiva said yesterday excuses were being made to dismiss the central bank governor.