Bank Of Thailand Ready To Act Against Strengthening Thai Baht

The Bank of Thailand has expressed some concern about a recent rapid currency appreciation and added that it was prepared to take measures to curb a rise that could jeopardize an already delicate economy.

The Thai Baht’s approximately 2% increase against the dollar last month was one of the steepest in Asia, backed by declining Thai coronavirus cases, easing national lockdowns and shallowness of the anticipated economic contraction in the first quarter.

The central bank said in a statement today that the backdrop could draw in short-term capital flows to the baht, and its output could be out of step with the economic fundamentals.

The Deputy Governor Mathee Supapongse said in the statement, “The Thai central bank is ready to take necessary steps to ensure baht strength doesn’t aggravate the fragility of the economy,” He added that the gold trade would also be analysed as a possible contributor to the monetary currency’s performance

Thailand’s economy heavily depends on tourism and trade, which both have been severely affected by the Covid-19 crisis. Officials foresee an economic slowdown of up to 6% this year and are prone to currency strength that could impair competitiveness.

The baht increased by 0.2% against the dollar at 8.50 a.m for the fifth day in a row.

SOURCE: Bangkok Post

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