"The committee suggested that the central bank should consider the long-term trend of the baht. The central bank cannot help exporters endlessly, like we donate blankets every year," Nontaphon Nimsomboon, chairman of the audit committee, said after its meeting.

The central bank's withholding measure on capital inflows was intended to brake the baht's rapid rise and give exporters a breather. It was not designed to completely stop the baht from going north, he said.

The central bank has come under intense pressure to lift the 30-per-cent capital reserve requirement. The market hopes that the revocation will shore up foreign investors' confidence, which has been deflated by a series of measures introduced by the interim government.

Governor Tarisa Watanagase said earlier that the central bank would drop the measure but keep the fully hedged requirement until no loopholes could be found and the banking system's liquidity was sufficient to serve the growth in hedging transactions.

Nontaphon said his committee proposed to the central bank's court of directors and its Monetary Policy Committee (MPC) that other measures should be put in place to support exporters' competitiveness rather than just the baht's depreciation.

Exporters have been enjoying the government assistance without making the needed adjustments.

"We are concerned about the exporters, so the country should implement some kind of strategy to strengthen them and encourage them to rely on themselves," he said.

The exporters had called for the central bank to intervene in the foreign-exchange market to weaken the baht after the central bank argued that exports were influenced by the economies of trading partners rather than the level of the dollar.

However, the central bank introduced the unremunerated reserve requirement last December when it realised that the baht was surging too much. It had gained about 17 per cent last year.

The central bank believes that interest-rate cuts would do little to discourage capital inflows and the baht's appreciation, while many analysts and economists have criticised the central bank for not cutting its policy rate sharply.

New Finance Minister Chalongphob Sussangkarn said on Monday that he saw room to implement monetary policy to boost the economy. He said a rate cut would not hurt economic stability, as inflation was mild - down to 2.3 per cent in February from 3 per cent in January.

Tarisa said the MPC would discuss its interest rate policy at its April 11 meeting.

"It's a duty of the committee. Let the MPC do its job," she said.

Anoma Srisukkasem

The Nation