Thailand to deal with China’s yuan devaluation
The depreciation of the Chinese currency, the yuan, will affect the baht of Thailand and export values of the country for the rest of the year, which will force the Bank of Thailand (BoT) to come up with measures to manage the Thai currency, according to economists.
(Source: Siam Commercial Bank’s Economic Intelligence Centre )Bangkok (VNA) - The depreciation of the Chinese currency, the yuan, will affect the baht of Thailand and export values of the country for the rest of the year, which will force the Bank of Thailand (BoT) to come up with measures to manage the Thai currency, according to economists.
Thai newspaper The Nation quoted Dr. Somchai Pakapaswiwat, an economist and lecturer, as saying that the baht will fluctuate and even depreciate when foreign investors take their money out in response to the BoT’s move to bring down the balance in non-resident accounts from 300 million baht (9.73 million USD) to 200 million baht per person.
However, the currency should appreciate again as Thailand is a safe haven for investors due to its high-foreign currency reserve and a public debt that is only 40 per cent of the gross domestic product, he said.
When the baht appreciates against the US dollar, it will also rise against the Chinese yuan, which will have a direct impact on Thai exports, because Chinese products will become cheaper, he noted.
He expressed his belief that the BoT may launch other measures to manage the baht, especially since it is appreciating over currencies from countries that are direct export competitors of Thailand.
A research by the Siam Commercial Bank’s Economic Intelligence Centre shows that the baht has risen 5.1 percent against the dollar since the beginning of this year while the yuan has dropped 2.3 percent.
According to the Thai National Shipping Council’s chairman Ghanyapad Tantipipatpong, the preliminary estimates show that a weaker yuan will increase the price of goods exported from Thailand by 10 percent.-VNA
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