ASEAN KEY DESTINATIONS
No fixed exchange rate for Thailand
The 1997 financial crisis occurred because the then government tried to fix the exchange rate, the bank said.
The BoT was responding to suggestions by former deputy prime minister and finance minister Virabongsa Ramangura that the central bank should cut its policy rate and reintroduce a fixed exchange rate to curb the baht's appreciation.
"The central bank is now using a flexible exchange rate, to avoid distorting the money market mechanism," a spokesman said.
The BoT governor said cutting the policy interest rate was a matter for Monetary Policy Committee to decide. It would meet next Wednesday.
The baht's value and related issues, including the exchange rate, will be considered at the meeting.
BoT board chairman MR Chatumongkol Sonakul said on Friday that he personally felt the need to raise the central bank's policy rate had lessened, because the strengthening baht had slowed down inflation.
"The repurchase rate cannot be immediately cut, as was called for. Any change in monetary policy must be done gradually, to prepare for dealing with any possible negative impact," he said.
MR Chatumongkol said even though he is the BoT board chairman he has no authority in setting the policy rate. That authority rests with the Monetary Policy Committee.
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