The prime minister has assured that the Bank of Thailand (BOT) is monitoring the weak baht, which he pointed out is not entirely bad for the economy and could help the key export and tourism sectors, as the currency hit multi-month lows.
Prime Minister Srettha Thavisin, speaking during a visit to the United States, said the government was not interfering in the central bank’s duty. He told reporters that the Thai currency’s depreciation was driven by capital outflows due to interest rate differentials.
The U.S. Federal Reserve held interest rates steady and its hawkish stance on monetary policy strengthened the dollar. The baht traded at 36.16 per dollar after hitting a more than 10-month low of 36.32 on Wednesday (20 Sep). The unit has weakened by 4.4% against the greenback so far this year.
The new government, which took office last month, is planning higher spending to help finance fresh policies to stimulate the economy weighed down by soft demand for exports and low investor confidence.
When asked whether a large public borrowing plan would affect fund-raising by the private sector, Prime Minister Srettha said market liquidity remained ample. (NNT)