ASEAN KEY DESTINATIONS
Thai minister pushes for regional currency action
Mr. Korn said he did not expect the US Federal Reserve's latest move to pump $600 billion into the economy to have a significant short-term impact on the baht and the Thai capital market. He said the government's existing measures remained effective enough to rein the baht, as the Fed's announcement was in line with the government's earlier projection of $500-700 billion. "Central bank governor Prasarn Trairatvorakul has confirmed discussions with central banks in the region, which are ready to impose joint measures if needed to curb possible speculative money flowing in," said Mr Korn.
"In the long run, it's widely known that when the US prints more money, it will weaken the dollar against all currencies. So every country needs to adjust, especially those countries with current account surpluses."
The United States is lobbying other G20 economic powers to introduce firm targets to keep trade imbalances at less than 4 percent of gross domestic product.
However, if the U.S. proposal gains traction, some countries may respond by erecting trade barriers to keep their current accounts under control, result affecting Thai exporters, said Mr. Korn.
He suggested that businesses adjust to cope with the impact and use different currencies in trading..
Aat Pisanwanich, director of the Center for International Trade Studies of the Thai Chamber of Commerce, said the problem would be reconciling the different policies of each country. "The joint action may look good and be psychologically positive, but execution would be tough," he said.
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