CENTRAL BANK ACTS TO|CURB BAHT STRENGTH
The baht’s appreciation of more than 7 per cent this year is due mainly to weakness in the US dollar and the improving domestic economy, said Vachira Arromdee, assistant governor of the Bank of Thailand (BOT).
However, Vachira said the financial markets had become volatile due to external factors, especially geopolitical risks and political issues in the US. Some market players may have used this opportunity to speculate on regional currencies and this has exerted pressure on baht.
The BOT has observed occasional increases in the volume of foreign exchange transactions. In response to this trend, the central bank requires commercial banks to provide additional information in the event of unusually high volume of transfers between non-resident baht accounts which may play a factor in baht speculation.
The BOT may also consider additional measures to limit the opportunity for further speculation in the currency.
Tyremaker Goodyear has reported a fall in sales for the second quarter.
“Our second-quarter results reflect the impact of volatile raw material costs and an increasingly challenging competitive environment, particularly in the United States and Europe,” said Richard Kramer, chairman and chief executive.
“In addition to higher raw material costs, we have seen a weakening in OE and consumer replacement demand across many of our key markets during the first half, despite strong underlying industry fundamentals.”
Goodyear’s second-quarter sales were US$3.7 billion, down from $3.9 billion a year ago, with the decrease largely attributable to lower tyre unit volumes.
Its net income for the quarter was US$147 million, down from US$202 million in the year-ago quarter.