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July 16, 2007

Central bank won’t adopt fixed exchange rate
Bank of Thailand governor Tarisa Watanagase on July 16 reiterated the central bank would not return to adopt the fixed exchange rate as some suggested.

She said it was impossible for the bank to accept the proposed change from the managed float rate to the fixed exchange rate.

“I have repeatedly said we will not return to use the fixed exchange rate as in the past. Now, I want to repeat our intention again.”

Mrs. Tarisa said the central bank had done its best to supervise the baht value all along. It had discussed ways to ease impacts of the sharp baht appreciation with many parties concerned such as academics late June and the Federation of Thai Industries and the Thai Chamber of Commerce early July.

Asked about doubts by some parties that the central bank’s supervision of the baht appeared to be untimely, she said the bank had performed its duty to the utmost and there is nothing wrong under the current situation.

The unit has appreciated by seven per cent since the beginning of this year, following a 12% gain last year.

In addition, the central bank chief said measures to ease foreign exchange regulation will be announced in the next few days to ease pressure on the baht.

The central bank is consulting various stakeholders including the Finance Ministry, exporters and academics on how best to allow for capital outflow towards offshore investment.
Mrs. Tarisa said this range of measures will be multi-faceted.

The governor is adamant that the bank is trying its best to tend to the currency situation and she urged investors not to panic. TNA

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