BANGKOK, May 27 – Thailand’s weakening baht is unrelated to the resolution to be made by the Monetary Policy Committee (MPC) in its meeting Wednesday, whether it cuts the interest rate or not, the central bank governor said today.
Prasarn Trairatvorakul said the Bank of Thailand (BoT) must closely monitor the baht’s movement given the volatile money market, both domestic and international.
He gave reassurances that the MPC does not feel uneasy regarding the policy interest rate as its decision is based on relevant and rational information.
The central bank has not intervened in the currency movement, he emphasised.
The Kasikorn Research Centre predicted that the MPC will probably reduce the policy rate by 0.25 per cent, indicating that the Thai economic slowdown has become an immediate problem that needs to be solved amid global economic risks, but said inflation is not a concern.
If the MPC reduces the interest rate, the government may have to adopt macro prudential measures to prevent bubble risks, the centre said.
Pongsak Assakul, senior president of the Thai Chamber of Commerce, said the private sector will leave the interest rate decision to the MPC but “we merely want the exchange rate to be rather stable and not too strong as it was last month.”
The central bank should see to it that the baht moves in accord with regional currencies, he said, adding that the baht movement at Bt29-30 against the dollar is acceptable.
The Commerce Ministry’ export target at 7-7.5 per cent is achievable if the baht moves in tandem with regional currencies, he said.