ASEAN KEY DESTINATIONS
Thai industries push for weaker baht
The Bank of Thailand yesterday welcomed new governor Prasarn Trairatvorakul. At the same time, it issued a circular requesting banks to adhere to existing measures aimed at curbing currency speculation via non-resident baht accounts.
The measures, which were implemented in February 2008 by the previous governor Tarisa Watanagase, called for banks to limit baht borrowing without underlying transactions to 10 million baht per non-resident entity. Banks are allowed to lend a maximum of 300 million baht to each foreign entity group without trade or investment transactions. The central bank has also called for banks to limit overnight foreign exchange transactions without underlying transactions to 300 million baht per non-resident entity group.
The baht was trading yesterday at a 13-year high of 30.19/23 to the US dollar, compared with 31.98 on Aug 1. The 5.64 percent increase over the past two months is the highest in the region, followed by the South Korean won at 3.68 percent and the Philippine peso at 3.49 percent.
The FTI previously proposed six remedies for the export sector, and while related sectors have come up with their own solutions, Mr Payungsak said businesses still faced problems, as suggestions for them to invest abroad will take time and require government assistance. New proposals by the FTI include asking the central bank to take a serious look at how the export sector is hurting.
The FTI chairman also said interest rates should be stabilised at 1.75 percent, as increasing them will result in more capital inflows. Interest rates are 0.25 percent in the US, 1 percent in Europe and 0.1 percent in Japan.
As well, he said, the Small and Medium Enterprise Development Bank of Thailand should make available 5 billion baht worth of loans at the minimum lending rate minus three percentage points to affected SME exporters.
Thanit Sorat, the FTI vice-chairman, said fourth-quarter losses could amount to at least 30 billion baht.
Comment on this Article. Send them to email@example.com
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below