Bank of Thailand: Timing crucial for monetary measures

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BANGKOK, April 24 – The Bank of Thailand (BoT) gave reassurances today that it has closely monitored the baht currency movement and relevant measures will be applied at the appropriate time. 

BoT Assistant Governor Chantawan Sucharitkul said every monetary measure has side effects and long-term consequences, compelling the central bank to take into careful consideration the impact of any measures on both exporters and importers.

Admitting there has been a sharp and swift surge of the baht, she said a specific, not macro, mechanism should be adopted to assist certain groups of exporters.

The strengthening baht has been a boon to Thai importers of heavy machinery and acquisitions of foreign businesses, she said.

Ms Chantawan said foreign capital inflow have boosted non-Thai investments in the government’s bond market by Bt140 billion in the first quarter – 60 per cent in long-term bonds at an average 4.7 years and 40 per cent in short-term bonds.

She insisted that Thailand’s policy interest rate, which is similar to that of neighbouring countries, is not the major attraction for capital inflow.

They find Thailand outstanding for its economic fundamentals and better credit compared to countries in the region, she said.

The baht has appreciated by 6.28 per cent since early this year, from Bt30.55 against the dollar to Bt28.82 against the dollar.

Ms Chantawan said Thailand’s economic fundamentals are strong compared to nearby countries.

Indonesia currency has declined in value by 1 per cent since early this year due to a budget deficit while the Philippine peso weakened by 0.63 per cent, the South Korean won depreciated 4.28 per cent from the tension in the Korea peninsula, the Singapore dollar weakened by 1.44 per cent and the Malaysian ringgit dropped slightly by 0.16 per cent.

Prime Minister Prasarn Trairatvorakul told the economic ministers meeting today that measures should be issued to help exporters, and that government agencies should accelerate Thailand’s trade penetration into major markets including China, Indonesia, India, Myanmar and secondary markets including Russia, Brazil and Africa.

BoT Governor Prasarn Trairatvorakul informed the meeting that the movements of the baht and gold remain normal and controllable.