ASEAN KEY DESTINATIONS
Thai exporters wary of baht rise
The baht ranks only behind the Japanese yen and Malaysian ringgit in regional appreciation. Vietnam's dong, in contrast, has fallen more than 5.5 percent against the dollar following several devaluations in a bid to boost exports.
Thailand's exports have continued to grow despite the baht appreciating faster than other currencies against the dollar, according to central bank governor Tarisa Watanagase. "Right now, we rank second in terms of currency appreciation in the region," she said yesterday. "Even so, exports have risen by as much as 30 percent, even though the stronger baht means lower revenues in baht terms, " she said.
Exports have been the main driver of the economy this year, surging 37 percent through the first six months to help push growth to 10.6 percent for the first half.
Capital inflows from a trade surplus and investment have been a major factor pushing the baht to appreciate, despite intervention by the central bank that has pushed the country's foreign reserves to record levels of more than US$150 billion (4.7 trillion baht).
Exports have already begun to slow in recent weeks, with July exports of $15.47 billion down sharply from $17.9 billion the previous month. Agricultural shipments, particularly of rice, were also down due to growing competition from Vietnam and other countries.
Commerce Minister Porntiva Nakasai said the central bank should speed up efforts to adopt measures to stabilise the currency.
Dusit Nontanakorn, the chairman of the Thai Chamber of Commerce, said the private sector could tolerate a stronger baht so long as it moved in line with other currencies in the region.
Federation of Thai Industries chairman Payungsak Chartsutipol said, "Some of our members are now projecting the baht to reach 30 baht to the dollar and are preparing their business plans accordingly," Mr Payungsak said.
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