FTI backs BoT´s move to ease capital outflow control

BANGKOK, 2 February 2010 (NNT) – The Federation of Thai Industries (FTI) has agreed with the Bank of Thailand’s policy to stimulate capital outflow with an aim to weaken the baht’s value.

FTI Chairman Santi Vilassakdanont expressed strong support over the central bank’s move to relax foreign exchange rules to decrease the pressure on the strong Thai currency. He said the measure would encourage more local investors to run business abroad as there has been currently an increase in foreign capital inflow, which resulted in the baht appreciation affecting exporters.

All parties were needed to closely monitor how much money investors would put in other countries as the policy would be deemed ineffective if the amount of investment overseas was not so high, said Mr Santi, adding that the private sector suggested the government to introduce additional tax incentives to boost investor’s confidence.

The FTI chairman backed the Commerce Ministry’s initiative to establish an information center for investors and a fund to assist small and medium businesses affected by the ASEAN Free Trade Agreement (AFTA). He said that the plan must be speedily implemented in order that the SMEs will have adequate information to map out their business plans amid high competitiveness in the ASEAN region.

Meanwhile, Mr Mangkorn Dhanasarnsilp, FTI Vice Chairman revealed that the key negative factors for SMEs currently include the uncertainty on global economic recovery and the baht’s appreciation. He elaborated that the private sector wished to see the value of Thai baht moving around 34 to 35 THB against the greenback.