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Among ideas floated by Suchart were keeping the baht undervalued by 5 per cent, reinstating the 100-per-cent state guarantee for bank deposits and further delaying new capital-adequacy rules for banks.

The minister is optimistic these steps will help the economy avoid a sharp slowdown next year, when the fallout from the global financial crisis is expected to hit hard.

Bank of Thailand Governor Tarisa Watanagase rejected most of these ideas, reasoning the central bank would keep inflation as the main policy target instead of adopting the exchange-rate target.

"If we want to fix the exchange rate, we must have a target, which would then be a complete departure from present policy. The world is now much smaller; it's hard to fix the value of a currency," she said, adding the baht should move in line with other regional currencies.

The unit has been gradually depreciating lately, due to capital outflows, the same as with other regional units.

She said the way to boost exports was to diversify foreign markets, cut costs or enhance productivity rather than manipulate the exchange rate.

The government should further promote tourism, in order to bring in foreign-currency revenue, because export revenue will likely face a slowdown, she said.

Financial costs here are already cheap, because of the low-interest-rate policy, she said.

However, Suchart said in a speech entitled "The Hamburger Crisis: Oppor-tunity or Risk?" that the Thai economy could be dealt a hard blow by the US crisis, with growth in gross domestic product (GDP) falling below 4 per cent next year.

The export sector, the key engine of growth, accounting for 60 per cent of GDP, is expected to expand only 10 per cent or less next year, down from 25 per cent this year.

"To cope with this economic condition, it is necessary that the baht weaken further, by about 5 per cent [relative to the US dollar], in order to boost exports," he said.

On deposit guarantees, he said the government should continue to provide 100-per-cent coverage for another three years, instead of just one more year as stipulated by law.

The blanket guarantee on bank deposits is due to end next August, when deposit insurance will apply to only Bt100 million per account per bank a year, then drop to Bt50 million and Bt10 million in following years and finally Bt1 million in August 2013.

Tarisa said the country's deposit-protection scheme was sound but that it was up to the Deposit Protection Agency to make any changes.

However, any moves need to be considered carefully for long-term rather than short-term benefits, she said.

Suchart also wants the government to delay implementation of the Basel II banking standard, in order to give more time for local banks to adjust.

But Tarisa said banks had been preparing for Basel II for years and that virtually all were ready to comply with the new rules, which should not hold back loan approvals.

Going ahead with Basel II would help restore confidence, she said.