ASEAN KEY DESTINATIONS
Thailand takes steps to stimulate outflows
The baht has appreciated by 8 percent against the US dollar so far this year as a result of capital inflows and a steady trade surplus. While a stronger baht has helped reduce the cost of imported oil and materials, exporters complain that currency appreciation has hit their profit margins and competitiveness.
Bandid Nijathaworn, a central bank deputy governor, said capital inflows were expected to continue into the region for the near future.
He said the central bank would ensure the baht moved without excessive volatility so that the private sector could adjust. Promotion of capital outflows will also help balance pressure on the currency as a result of inflows.
In recent years, regulators have been gradually easing regulations on foreign investment to facilitate outflows.
Business leaders questioned whether the measures would rein in the baht. Santi Vilassakdanont, the president of Saha Pathana Inter-Holding Plc, said certain measures may be impractical, and suggested more aggressive action such as a requirement that inflows must stay in the country for at least three years, or taxing foreign-exchange gains.
Paiboon Ponsuwanna, chairman of the Thai National Shippers' Council, said the measures might take three to five years to produce a tangible impact.
"Exporters are now on the edge of an abyss, but what the central bank has introduced ... is like constructing a bridge," he said. "What we need are measures that have a short-term impact to stem the baht's strength."
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