Kittiratt Na-Ranong told reporters after the economic ministers' meeting that concentration will be given to stabilising the baht without the use of unconventional means, whether the Tobin tax which aims at penalising short-term currency speculation, interest rate adjustment or prevention of foreign capital inflows.
Those measures will have a negative impact on foreign investors’ confidence in Thailand, he said.
“We have measures to closely monitor the strengthening Thai currency,” he added. “Let us ignore the unconventional methods in the past which posed more disadvantages.
“We are currently exercising natural measures based on the responsibilities of each agency. The Finance Ministry is in charge of finance policy and [the country’s] investment plan while the Monetary Policy Committee is responsible for the interest rate. It is a body of individuals with which we cannot interfere.”
Mr Kittiratt’s statement was a reversal from his stance earlier in the day when he said he would discuss the Thai currency’s successive appreciation and the policy interest rate with the central bank chief in the economic cabinet meeting and that the government’s intention should not be misinterpreted as a political intervention.
Thai stocks dropped over 30 points today amid fears of possible measures to weaken the baht.
Mr Kittiratt said the stock market is sometimes too sentimental but “we have to let it operate in accord with the market mechanisms.”
He repeated that the government will never issue any unnatural measures.
The government’s Bt350 billion project for water management and Bt2 trillion infrastructure investment will stimulate the country’s economy and help depreciate the baht when US dollars are spent for the projects, he added.