New BoT measures to contain baht appreciation

BANGKOK, Aug 4 (TNA) – Bank of Thailand (BoT) Governor Tarisa Watanagase on Monday revealed the central bank will produce a new package of measures to encourage private companies and local investors to invest more overseas in a bid to contain the baht appreciation.

She said the new package is additional to the previous one under which private companies are allowed by the BoT to invest in debt instruments and securities overseas.

Previously, Deputy Prime Minister Korbsak Sabhavasu suggested the strengthening of the baht against the US dollar be addressed through various measures.

He urged the central bank to revise the measure to control the capital outflow.

Mrs Tarisa said the baht had moved in the same direction with other currencies.

From the beginning of this year to the first quarter, the baht had appreciated 4 per cent against the US dollar while Indonesian rupiah had strengthened 16-17 per cent and South Korean won had risen 13-14 per cent.

In the second quarter, the baht had strengthened only by 0.06 per cent while other currencies had appreciated by an average of 2-4 per cent.

In consequence, she said the baht had moved in the medium level, and it had not caused Thailand to lose competitiveness.

She attributed the stronger baht to the trade surplus as imports reduced in a greater amount of exports.

Should the economy pick up, exports and imports would be balanced and the trade surplus would lessen, which could make the baht weaken.

Because this, private companies and investors must oversee risks because no one could forecast the direction of the baht. (TNA)