BoT warns investors of capital flow reversals


BANGKOK, 27 April 2011  – The Bank of Thailand (BoT) has warned investors and entrepreneurs of high risk from fluctuations of capital movements in the latter half of 2011. 

BoT Governor Dr Prasarn Trairatvorakul stated that the Thai baht has currently been stronger due to more capital inflows into the Asian region in response to an indicator that the region’s economic growth is much faster than the US; however, it is difficult to identify if the foreign capital inflows are for speculation or in response to risk appetite.

Nevertheless, Dr Prasarn affirmed that the BoT will monitor those capital movements very closely. He deemed all measures to control the capital unnecessary for the time being.

The governor warned that although the kingdom is facing capital influx, money outflows are possible alike; therefore, all investors and entrepreneurs should stay cautious as capital flow reversals are considered high risk to the country’s economy in the latter half of this year.

Dr Prasarn added that the BoT is monitoring the inflation rate closely in the wake of the higher global oil price, as well as the result of the upcoming general election which can affect the country’s economic growth.