BANGKOK, 24 April 2013 The Bank of Thailand (BoT) affirms that it has been closely monitoring the baht movement and that appropriate measures are ready to be implemented to curb the appreciation.
BoT Assistant Governor Chantavarn Sucharitakul revealed on Wednesday that the central bank has been keeping a close eye on the baht situation after the Thai currency has strengthened significantly within a short period of time.
Ms. Chantavarn stated that the BoT has also prepared a set of measures for immediate implementation, when deemed necessary, to tame the stronger baht.
According to the Thai central bank, the local currency has appreciated 6.28 percent against the US dollar in the first quarter of this year, mainly due to strong economic fundamentals, stable growth, the upgrade of Thailand’s credit ratings and more clarity in the government’s push to pass the 2-trillion baht loan act.
She said such favorable factors have made foreign investors more confident in the baht and led to constant inflow of overseas capital.
However, the BoT Assistant Governor conceded that if the baht appreciates too fast or too much, Thai GDP may be affected.
When asked about calls for short-term measures to curb capital inflow, Ms. Chantavarn said any implementation will be subject to timing as all factors and possible consequences must be taken into consideration.
She also brushed aside criticism that the country’s benchmark interest rate of 2.75 percent is the major reason behind the influx of speculative funds from overseas, which drove the value of the baht up.
