FTI appeal: industries want policy rate to remain stable

The Federation of Thai Industries has urged the Monetary Policy Committee of the Bank of Thailand to maintain the policy interest rate for at least three months in order to allow the baht to weaken further against the US dollar to the benefit of exporters.

"We are pleased with the baht's value of 34 to 35 per dollar. The cen¬tral bank should be careful about a stronger baht because it would nega¬tively affect exports, which account for about 80 per cent of gross domes¬tic product," FTI chairman Santi Vilassakdanont said yesterday.

The recent weakening of the baht was the main factor driving manufac¬turers' confidence in July, aside from lower fuel costs. The FTI's manufac¬turing confidence index increased to 76.9 points last month, the highest level in three months. The index was 71.4 points in May and 73.6 points in June.

FTI vice chairman Adisak Rohitasune said softer fuel prices had reduced the cost of production and transportation, while the baht's depre¬ciation had boosted exporters' com¬petitiveness.

However, manufacturers are con¬cerned about the economic woes in the United States, which are in turn shaking the European economy strongly.

"We have tried since the end of last year to encourage our members to explore new markets in order to cope with the global economic crisis. However, [on top of that] we agree that the government should establish a clear direction for alternative fuel in order to sustain the industrial sector in the long term," Adisak said.

FTI executives are scheduled to meet Industry Minister Mingkwan Sangsuwan next Friday to discuss their proposal that he boost collabo¬ration between the public and private sectors, Santi said.

"We have also prepared other issues to discuss with him. For example, the financial support for small and medi¬umsized manufacturers, progress on the Southern Seaboard project, the water shortage in the industrial sec¬tor and the issue of developing indus¬trial estates on the border with neigh¬bouring countries," he said.

Meanwhile, the FTI's Automotive Industry Club yesterday reported that the production of vehicles had surged 19.02 per cent year on year to 841,156 units in the first seven months of the year.

Automotive exports in the period grew 25.81 per cent and domestic sales increased 6.6 per cent from the same period last year.

However, domestic sales in July dropped 12.5 per cent due mainly to sluggish sales of onetonne pickups, which fell 32.8 per cent year on year.

E20compatible cars helped boost passengercar sales by 27.5 per cent in the month.