The Governor of the Bank of Thailand has revealed that the Bank is prepared to implement currency intervention measures to assist exporters, emphasizing that they are not complacent. He noted that over the past five years, foreign reserves have increased by $100 billion, which is a result of managing the currency.

Mr. Sethaput Suthiwartnarueput, the Governor of the Bank of Thailand, discussed the strengthening of the Thai baht against the US dollar, stating that the Monetary Policy Committee (MPC) is concerned about the rapid appreciation of the baht. Normally, such appreciation may not significantly impact export volumes, but it clearly affects exporters' margins. This comes at a time when exporters are already facing challenges due to a stagnant global economy, leading to decreased demand and debt issues, which in turn affects their financial stability.

"Therefore, this is a matter of great concern for us. If their financial resilience is weak, the likelihood of exporters facing problems increases, which impacts credit quality. Hence, the MPC is particularly worried this time," he said.

He explained that the rapid appreciation of the baht is partly due to news about vaccines, which has led to expectations that tourism will recover. This would result in a significant surplus in Thailand's current account, prompting speculation that the baht will strengthen. The concerning aspect is that news about vaccines has contributed to the baht's appreciation.

As for the measures to be implemented, they are currently under consideration, focusing on appropriate actions that take into account the overall picture, not just the direct effects on the currency, but also potential side effects.

"We are in the process of considering suitable measures. I would like to emphasize that we understand there are people who are struggling and worried for the reasons mentioned. I assure you that we are not complacent. Sometimes, people see the strong currency and think we are not doing anything. Our lack of communication does not mean we are inactive. For instance, the current interest rate is at 0.5%, the lowest in history and in the region. Over the past five years, our reserves have increased by $100 billion, as we have been buying dollars to slow down the baht's appreciation, reflecting that we are not idle," he stated.

He added that an increase in reserves is not necessarily desirable. Consider the scenario where the baht strengthens by 1 baht; this results in a loss of value amounting to $100 billion. This explains why there have been reports of losses in some operations, but in reality, there is nothing to worry about. It serves as an example that we are not inactive," Mr. Sethaput concluded.

SOURCE : www.bangkokbiznews.com