BOT chief urges exporters to rely on factors other than exchange rate to achieve growth
July 16, 2014 00:00 By Erich Parpart The Nation 2,217 Viewed
The recent strengthening of the baht due to an increase in political certainty and brighter economic prospects will not affect the export sector and domestic investment, and the central bank wants exporters to rely for their growth potential on other fact
Bank of Thailand Governor Prasarn Trairatvorakul yesterday said the baht was currently stable, having appreciated slightly as a result of reduced political uncertainty and the return of foreign funds, while its strength would not have any impact on trade and the export sector.
"The exchange rate of the baht versus the US dollar was quite stable in the first half of the year, and its movement is within the middle range when compared to other important currencies in the region in terms of exchange rate, fluctuation and volatility. It does not pose an obstacle for trade and investment," he said.
As for exports, Prasarn said he wanted firms to rely on other factors besides the exchange rate in order to strengthen the sector’s stability and lessen the risk from currency volatility as a result of external pressure.
"Foreign investors want to see currency stability and, if our exporters are only concerned about having a weaker baht, it will become an obstacle for investment, especially when the country needs investment in order to grow and recover," he added.
Chantavarn Sucharitakul, assistant governor of the financial markets operations group at the central bank, added that investment funds in the stock and bond markets saw a net outflow of Bt42 billion and Bt41 billion respectively in the first half of the year.
However, the Stock exchange of Thailand Index has managed to increase by 14.4 per cent from the end of last year, which is in line with the increase in other regional bourses and the rise in sentiment from the recovery of Asian economies, she explained.