Thai Businesses Urging Central Bank to Stabilize Baht Currency Amid Rapid Strength Surge
Thai businesses are calling on the central bank to take action to stabilize the baht currency, which has seen a rapid increase in strength that could impact fourth-quarter growth, according to a senior chamber of commerce official on Monday.
Deputy chairman Phot Aramwattananon expressed concerns that the baht's unexpected surge was affecting exports and tourism, both vital sectors for the Thai economy. The country has been facing challenges since the pandemic and has been trailing behind its regional counterparts.
The immediate impact of the baht's strength has been felt, with exports, particularly in agriculture and food products, losing competitiveness. The chamber of commerce emphasized the importance of the central bank overseeing the baht's stability to align with global and domestic economic conditions.
As of Monday morning, the baht was trading around 32.8 to the U.S. dollar, marking its strongest level in over 19 months after gaining 13% against the dollar since April's low of 37.17.
Bank of Thailand (BOT) Governor Sethaput Suthiwartnarueput noted on Friday that the central bank was closely monitoring the baht, which has been bolstered by a weaker dollar, leading to increased volatility. Despite the baht's strength, exports have not been significantly impacted, but the BOT aims to ensure stability without excessive fluctuations.
In a positive development, the chamber of commerce raised its 2024 growth forecast from the previous 2.5% to a range of 2.6% to 2.8%, attributing the upward revision to the government's economic revival policies. Stimulus measures are expected to contribute an additional 0.2 to 0.3 percentage points to growth, according to Thanavath Phonvichai, president of the Thai Chamber of Commerce University.
Analysis: The article highlights the concerns raised by Thai businesses regarding the baht's rapid strengthening and its potential impact on key sectors of the economy. The call for the central bank to intervene to stabilize the currency reflects the importance of maintaining competitiveness in exports and tourism. The positive outlook for economic growth, supported by government policies and stimulus measures, signals a potential recovery and expansion in the coming years, offering opportunities for investors and businesses to capitalize on the anticipated growth in the Thai economy.