The Central Bank of Thailand and the Government remain concerned about the appreciation of the baht. Both are now ready to take further steps to control the currency.
For several months now, the Central Bank of Thailand has been taking steps to limit the baht’s gains, especially after its 9% rise against the dollar in 2019. The rise has hurt the country’s exports.
According to Deputy Governor Mathee Supapongse, the government, the private sector and the central bank need to work together to manage these fluctuations by implementing long-term measures.
The Thai authorities’ efforts to curb the rise of the baht were aided by the publication of the U.S. report on the monetary policies of its major trading partners, showing that Thailand narrowly avoided a watch-list designation.
However, M. Mathee says that the government is not complacent about the way Thailand is judged on variations in the baht.
He goes on to explain that the Thai authorities “will continue to closely monitor and manage the currency according to their capabilities and conditions” using “many tools” to do so.
Measures already put in place by the central bank include :
- Reduced interest rates to a record low of 1.25% in 2019,
- A relaxation of the rules on capital outflows,
- Restrictions on short-term capital inflows.
The Thai government is also planning measures to stimulate imports of capital goods and machinery for investment to help reduce pressure on the baht.
Finance Minister Uttama Savanayana also said on Monday that any measures taken by the authorities to curb the currency’s gains will not disrupt the baht’s “market mechanism”.
Sources: Bloomberg.com Thailand Says It’s Ready to Take More Steps to Curb Baht