BoT assures capital outflows, falling baht manageable

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BANGKOK, Aug 28 – The Bank of Thailand (BoT) gave assurances today that Thailand’s substantial international reserves can cushion the country in dealing with foreign capital outflows and the rapidly depreciating baht.

BoT Governor Prasarn Trairatvorakul said he could not predict when foreign investors would stop diluting their portfolios or return to the Thai bourse.

Capital has been transferred out of newly-emerged markets back to the US but Thailand’s economic fundamentals remain strong with only a slight current account deficit, he said, adding that the kingdom’s third quarter economic growth will definitely be better than in the second quarter.

Mr Prasarn said he is willing to explain to investors about the economies of newly-emerged countries which are different from the economic fundamentals of India and Indonesia – both suffering from long-standing current account deficits.

He said investors must analyse the differences, hoping that the domestic investment situation should improve after a meltdown in investor anxiety over the QE measures.

Mr Prasarn said the possibility of a US attack on Syria would likely push up global oil prices and increase the predicted price of Dubai crude oil to at US$105-107 per barrel.

However, the impact should be short term, he said.