BANK of Thailand Governor Veerathai Santipraphob today refused to pinpoint what the baht and US dollar exchange rate should be despite strong calls from the private sector to prevent the Thai currency from strengthening too much and keep this rate at 34.50 baht against the greenback.
He told Thai News Agency that currency exchange rate can be not deliberated on a daily basis and up to this point the central bank has continuously discussed this issue with the private sector.
What the private sector wants the Central Bank to do is to prevent the Thai currency from fluctuating more than the currencies of its competitors and also not move in tandem with regional currencies, Mr Veerathai added.
In the past the Thai baht has been moving close to regional currencies as can be seen by the appreciation of 4% since the beginning of this year but the Malaysian ringgit, Korean won and Japanese yen did strengthen more than this.
However the private sector is now better able to handle currency fluctuations and exchange rate risks, he added.
The Bank of Thailand strongly focuses on the Thai currency when there is heavy investment inflow and when a stronger currency affects business and the economy. It has many tools for example tweaking interest rates, currency rates and monitoring the inflow and outflow of investment funds.
Mr Veerathai warned that the Thai baht will continue to fluctuate because of external factors especially the differing global monetary policies of main industrialized countries.
That the Thai baht is strengthening is because the US dollar has weakened against most currency and the Central Bank has been in touch with financial institutions to encourage the private sector to protect themselves from this risk.
The Central Bank also advises the private sector to use regional currencies for regional trade because regional currencies move more stably than the key currencies and Thailand’s regional trade has increased.
TOP: Experts closely watching currency movement. Photo: Ken Teegardin at SeniorLiving.Org, CC-By-2.0
By Thai Residents reporters