Thai central bank reaffirms competence to oversee baht

BANGKOK, Sept 9 (TNA) – Bank of Thailand (BoT) Assistant Governor Suchada Kirakul on Tuesday affirmed that the central bank is still in a position to oversee the baht to ensure it moves steadily on a continuing and secure basis.

Her affirmation followed statements from some commercial banks that the BoT had signalled its inability to properly supervise the currency movement.

Mrs Suchada said the central bank had never hinted it was not in a position to oversee the baht.

What the bank had done was to urge entrepreneurs to hedge against currency exchange risks and prepare for the possible fluctuation of the currency in the future.

Should the economy pick up in the next two to three quarters, she said, more foreign capital might flow into Asian countries, including Thailand, which would cause the baht to fluctuate.

She said that since early this year, capital had mostly flowed into the country, but not in a large amount if compared with the capital inflow and outflow of around Bt140 billion last year.

An investment of only Bt30 billion had been made since the beginning of this year.

The BoT executive said the strengthening of the baht stemmed not only from the capital inflow, but also from a huge surplus in the balance of payments.

In the first seven months of this year, the balance of payments was in surplus of around US$10 billion.

The BOT had eased restrictions on overseas investment by Thai investors by allowing a corporate entity with total assets of over Bt5 billion to do that without seeking permission from the central bank.

But only had a few major companies sought BoT permission for such investment, about $210 million overseas, to purchase raw materials for industrial production, she added. (TNA)