The Central Bank of Thailand is considering additional measures to curb the rising baht but believes there is no need to raise its benchmark rate if inflation rises.
The BoT reiterates that the Monetary Policy Committee (MPC) is concerned about the strength of the baht and suggests encouraging fund outflow rules. The MPC is ready to deploy policy instruments where necessary.
That not everyone is happy with the role of the Bank of Thailand (BoT), is evident from statements by Jitipol Puksamatanan, chief strategist at Krung Thai Bank: “The central bank's instruments to dampen the baht have been limited to verbal intervention and an interest rate cut”.
The 9% surge in the baht against the dollar last year is causing headaches for the Bank of Thailand. According to the Central Bank, they have taken measures such as lowering the base interest rate and relaxing rules for currency outflows. Nevertheless, they remain concerned about the strong Baht and additional measures will be considered. The stronger currency is hurting Thailand's economic pillars such as exports and tourism, at a time when economic growth is disappointing.
“The central bank still has room to further cut its key interest rate in order to reduce the value of the baht and stimulate the economy,” said Komsorn Prakobphol, a senior investment strategist at Tisco Financial in Bangkok.
Strategists at commercial banks expect the value of the baht to rise even more this year. Krung Thai predicts that the baht will end this year at 28,7 per dollar as the trade surplus and the amount of foreign reserves will attract investors worldwide.
“This process can only be broken if we see some exceptionally strong moves from the BoT,” said Terence Wu, a currency strategist at OCBC, who has previously correctly predicted the baht's massive appreciation. “If the BoT does nothing, the baht will rise to a record 29,44 per dollar by the end of the year,” Wu predicts.
Source: Bangkok Post
No comment on this item yet, which surprises me. It's not an unimportant topic to me. I agree with the statement and far too little is being done by the central bank in Thailand about this problem for many. I'm not in the money and don't know too much about it and I want to keep it that way, so please leave it to the experts. It seems to me that other things prevail with the banks. They serve a different interest than the interest of many account holders. You can see that at the ABN Amro bank, how it treats people living abroad and their Dutch bank account that they lose or have already lost. You have become a second-class Dutchman by emigrating and you will notice that too. Own fault.
I suddenly had to think back to the old days, the 60s and 70s, when my employer still handed me the money at the end of the week. No hassle with banks. Then my first bank account at the Postbank, on the corner in a cigar shop, those were the days. Convenience serves people, but ultimately the bank. Now the banks are indispensable and have become a necessary evil for many. The corruption you read a lot about doesn't make me feel good and I hope it's not just me. Shared sorrow is half sorrow.
But once again I am not interested in being there for ordinary citizens and many foreigners with long-term residence in this country. But I do have my view on it because the bank accounts of "the top pieces" in the banking industry have not become any worse. And perhaps, in addition to their unwillingness, they are also too self-willed or ignorant to serve everyone.
Not so long ago, when asked, the Director of BoT said that the (Thai) business community should be wise enough not to allow the value of the TBH to rise further.
And then he crawled back behind his desk to see the cat from the tree. His position/task description has apparently not yet sunk in.