The US withdrawal of monetary stimulus through quantitative easing (QE) will not inflict a heavy blow on Thailand thanks to the country’s high foreign reserves and liquidity, Deputy Prime Minister/ Finance Minister Kittiratt Na Ranong said last week.
The Thai stock and gold markets plunged as the baht weakened to Bt31 against the greenback after the US Federal Reserve’s announcement on QE.
Kittiratt said the Bank of Thailand (BoT) was instructed to ensure that the exchange rate volatility and capital outflow will not have a negative impact on the baht.
Pongpen Ruangvirayuth, BoT deputy governor, predicted an increased outflow of foreign capital but promised that the central bank would closely monitor the movement.
She said the private sector should be on alert for abrupt changes in exchange rates. The Thai currency closed at Bt31.13/15 against the dollar last Friday.
Charamporn Jotikasthira, president of the Stock Exchange of Thailand, said the Thai bourse was down in tandem with global and Asian stocks but reassured that the Fed’s announcement on QE will not affect the Thai economy’s strong fundamentals.
Domestic gold prices changed 15 times Friday, June 21, to close at Bt19,150 per baht weight, down Bt800, as investors were instructed to be extra cautious as the global price may drop from US$1,300 per ounce to US$1,250 per ounce, or at about Bt18,500-18,000 per baht weight.