Central bank admits currency intervention
THE Bank of Thailand today (Sept. 11) admitted that it has been intervening to prevent the Thai baht from strengthening too quickly with the strong appreciation continuously pushing up the country’s international reserves, Thai News Agency said.
Methee Supapong, Bank of Thailand’s deputy governor for financial stability, said the Central Bank has been intervening in the foreign exchange market to curb strong baht appreciation from time to time which has led to the country’s international reserves rising to US$196.2 billion or around 6.51 trillion baht.
Moreover the Bank of Thailand is also watching the inflow of investment funds in greater detail while also asking commercial banks for information especially on the movements of accounts held by those overseas to determine what these inflows are being used for and how much of it is for speculation.
Mr Methee added that Bank of Thailand has prepared measures to deal with this issue and will implement them when the time is suitable.
He also admitted that the Thai baht is right now appreciating the most in the region with many factors contributing to this but the key one is the weakening of the US dollar which has dropped by 10.5% since the beginning of the year because the US economic stimulus measures were in keeping with what investors had expected and US economic figures are lower than what the market anticipated so for this reason the US Federal Reserve will unlikely raising interest rate anytime soon.
Moreover foreign investors are now less concerned about the country’s political situation and better exports and soaring tourism have also helped Thailand register trade surplus.
CAPTION:
Top A pawn shop worker counts Thai baht banknotes before she purchases items from a customer in Bangkok. Photo: Reuters via IB Times
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