Joint private panel to propose eight measures to govt as baht's strength hits exporters
The Kingdom's three most powerful private-sector organisations have proposed that the government tackle the baht's rapid appreciation via eight measures, as exporters claim they are increasingly losing competitiveness vis-a-vis their foreign counterparts.
After a meeting of the Federation of the Thai Industries (FTI), the Board of Trade of Thailand and the Thai Bankers Association, the business sector said the government needed to come up with concrete measures to tackle the effects of baht's rapid strengthening.
The biggest priority is to ensure that the baht is not stronger than the currencies of 14 competitor trading nations in Asean and elsewhere in Asia, including China, India, Bangladesh and Sri Lanka.
Payungsak Chartsutipol, chairman of the joint private committee and also of the FTI, said the eight measures would be proposed to the government soon in a bid to ensure that the baht does not hurt exporters any further.
"Many exporters, in particular small and medium-sized enterprises, have been hit hard by the rapid strengthening of the baht. The government needs to ensure that its measures ensure the competitiveness of Thai exporters," he said.
He said the government could come up with even more stringent measures to tackle the baht's rise, for example by reducing the policy interest rate and imposing measures to deter short-term speculation if the currency's appreciation got out of hand.
Payungsak said the most favourable exchange rate was about Bt30 against the US dollar.
The eight measures emerging from the joint private committee meeting are: preventing baht volatility; preventing the unit from appreciating against regional currencies, with a focus on 14 countries in Asean and elsewhere in Asia; relaxing measures for traders to hold foreign currencies; encouraging SMEs to open foreign-currency deficit accounts; making it easier for SMEs to access currency-hedging tools; separating foreign accounts and getting "hot money" under control before it affects foreign-exchange rates; having the Board of Investment launch incentives to encourage Thai investment overseas; and getting the government to speed up spending on infrastructure projects.
Board of Trade chairman Phongsak Assakul said the government urgently needed to control the baht's volatility, as its recent appreciation had seriously damaged traders.
He said the eight measures would be proposed to Commerce Minister Boonsong Teriyapirom this week during a meeting between the ministry and the joint private committee. The panel will also propose the measures to the Finance Ministry and the Bank of Thailand soon.
The first priority the government needs to consider is how to help SME exporters, since they are facing a double impact from the baht's strength and the minimum-wage increase, he added.
Yesterday's meeting came up with a proposal to ask for the government's assistance in helping enterprises, especially SMEs, cope with the increase in the daily minimum wage.
FTI vice chairman Vallop Vitanakorn said the government should set up a fund worth Bt30 billion under a three-year project to subsidise 1.4 million to 1.5 million SMEs having to pay their workers more.
In a separate matter, the joint private panel expressed its delight with Parliament's approval of the newly amended Anti-Money Laundering Act to ensure that Thailand can be taken off the international Financial Action Task Force's "Dark Grey List" when it is revised this quarter.