BANGKOK: Thailand’s economic growth outlook of 2.8% next year is “disappointing” and policy makers are doing what they can to curb excessive gains in the currency, governor Veerathai Santiprabhob says.
A “satisfying” level of growth should be 3.5% to 4% a year, the governor said.
The Bank of Thailand (BoT) is “actively managing the exchange rate” and monitoring short-term foreign inflows closely to avoid speculation in the baht.
The BoT last week lowered its growth forecasts for this year given the weaker global backdrop, trade disruptions and a stronger currency.
Veerathai said a big risk to the economy is lower employment, adding that a number of manufacturers are relying on temporary workers, and some are reducing work hours.
He made the following comments about the baht, which has gained almost 8% against the dollar this year, the best performer in Asia:
“The central bank is actively managing the exchange rate. Without our actions, the baht would be much stronger than the current level. Still, we are careful of any excessive interference because there would be some side effects.
“It would also expose Thailand to more accusations as a currency manipulating country. The country’s foreign currency reserves have jumped significantly because BoT buys a lot of dollars to slow the baht’s strength.
“We are closely watching the inflows of short-term foreign funds. We don’t want to see the excessive speculation on the baht exchange rate.” — Reuters
