ASEAN KEY DESTINATIONS
Thai finance minister concerned about currency's strength
But he also says there are opportunities offered by the stronger currency. The government and the Bank of Thailand are trying to manage the baht to minimise fluctuations but the baht is likely to gain further ground, he said.
The baht has gained 8 percent against the US dollar since early this year, to about 30.7 baht. "The baht is expected to appreciate further since the US dollar will weaken," Mr. Korn told an economic seminar last night held by Ramkhamhaeng University's political science faculty. The US needs to repay more of its foreign debt and is battling to restore confidence in its economy, he said.
Thai business operators should take advantage of the appreciation of the baht if they can. He suggested that exporters look to markets with stronger currencies than the baht, such as Malaysia and Japan. Thai goods will look cheap in such markets and exporters might be able to raise prices.
Local firms could also take advantage of the strong baht to improve their production capability and efficiency by upgrading their technology and machinery. A stronger baht helps make imported raw materials and machinery cheaper.
Local investors should invest overseas. The government would ease regulations to make this easier for them.
Mr Korn said the government was trying to build economic equality by opening up access to finance for poor people.
Dhanin Chearavanont, chairman and CEO of the Charoen Pokphand (CP) Group, said the government should not intervene in the baht to make it weaker. This would benefit only some groups. The best way for the government to help business operators was to deploy the country's capital reserves, which have increased as a result of the stronger baht, to help firms improve machinery and production capability.
"CP is one of the hardest hit firms since up to 90% of the group's raw materials are bought locally and it is also a big exporter," Mr Dhanin said.
The government should promote Thai goods in new markets where exporters can take advantage of the stronger baht, particularly Japan and Malaysia, he said.
The Commerce Ministry should also turn its focus to elsewhere in Southeast Asia, China, and India to develop markets for Thai goods, instead of the US and Europe as in the past.
Mr Dhanin said the government also should speed up investment in infrastructure reliant on imported raw materials as it could make savings with the stronger baht.
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