Thai central bank prepares measures against baht price’s surge
The Bank of Thailand is preparing measures to control short-term capital inflows, while continuing to relax restrictions on outflows to cope with the strong baht, according to minutes of a policy meeting last month.
Thai baht (Source: thethaiger.com)Bangkok (VNA) – The Bank of Thailand is preparing measures to control short-term capital inflows, while continuing to relax restrictions on outflows to cope with the strong baht, according to minutes of a policy meeting last month.
The monetary policy committee (MPC) felt rapid appreciation of the baht might not be consistent with economic fundamentals and could impact economic growth, according to the minutes of its June 26 meeting released on July 9.
At the meeting, policymakers left the benchmark rate unchanged at 1.75 percent.
Given moderating economic prospects, current economic data from various sectors reflected that the Thai economy would be more sensitive to currency appreciation, the minutes said.
The committee deemed it necessary to prepare short-term capital inflow management measures ready to be implemented at an appropriate time, as well as to continue relaxing more capital outflow regulations to encourage a greater flow of outward portfolio investment by residents.
But the minutes did not say what measures would be implemented.
On July 8, governor Veerathai Santiprabhob said the central bank was not happy with "hot" money moving into the country and was ready to impose measures if inflows were unusually large.
The baht has risen about 5.6 percent against the US dollar this year, becoming Asia's best performing currency. That has put more pressure on Thailand's export-driven economy at a time when global demand is cooling and the US-China trade war is disrupting supply chains worldwide.
The BoT projects economic growth will slow to 3.3 percent this year, from last year's 4.1 percent, but it is counting on a second-half rebound that some analysts doubt will materialise.-VNA
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