Vietnam gets reprieve, Thailand on guard after US Treasury Report


  • Thailand
  • Tuesday, 14 Jan 2020

The Bank of Thailand has also been intervening in the currency market to curb the baht after it gained almost 9% against the dollar last year, the most in Asia. Governor Veerathai Santiprabhob said in an interview last week that its actions aren’t aimed at gaining an export advantage over trading partners.

The US Treasury gave relief to South-East Asian nations at risk of being labelled currency manipulators.

In its semi-annual report released on Tuesday (Jan 14) in Washington, the Treasury cited 10 countries that are possibly using their exchange rates to gain an export advantage over the US Three of them -- Singapore, Malaysia, and Vietnam -- were from South-East Asia and retained on the list from May 2019, as expected.

Thailand, which was at risk of being added to the monitoring list, was left off.

By rule, the Treasury retains countries on the monitoring list for at least two consecutive reports when they are first cited, hence it kept Singapore, Malaysia and Vietnam on the list.

The Treasury found that Vietnam had violated only one of the three criteria in the latest report, down from two in May.

Thailand’s goods trade surplus with the US soared past the critical US$20bil mark in the 12 months through November, according to US Census Bureau data, while its current account surplus exceeds 2% of GDP.

The Bank of Thailand has also been intervening in the currency market to curb the baht after it gained almost 9% against the dollar last year, the most in Asia.

Governor Veerathai Santiprabhob said in an interview last week that its actions aren’t aimed at gaining an export advantage over trading partners.

Deputy Governor Mathee Supapongse told reporters in Bangkok Tuesday that authorities won’t be "complacent” after avoiding the Treasury watchlist, and "will continue to closely watch out and manage the currency.”

Asked on Tuesday for comment on Singapore’s status in the latest report, the Monetary Authority of Singapore referred to remarks by Managing Director Ravi Menon in a June press conference.

Menon had cited "active dialogue with the US Treasury to ensure that our monetary policy framework and the role of foreign exchange intervention operations are well understood.”

Indonesia and the Philippines were not mentioned in the report. - Bloomberg
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