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Thailand urged to take steps to ease impact of rising baht
Publication Date : 26-01-2013
The Federation of Thai Industries (FTI) will propose seven measures to the Bank of Thailand next week to deal with the rising baht, which it says has hurt some members' business.
FTI vice chairman Chen Namchaisiri said yesterday after a members' meeting that the BOT would be urged to take the following seven steps: prevent baht volatility; prevent the baht from appreciating against regional currencies; encourage small and medium-sized enterprises to open foreign-currency deficit (FCD) accounts; make it easier for SMEs to access currency-hedging tools; get "hot money" under control before it affects foreign-exchange rates; have the Board of Investment launch incentives to encourage Thai investment overseas; and get the government to speed up spending on infrastructure projects.
According to the FTI, the baht appreciated 3.13 per cent against the US dollar between December 21 and January 17 - the highest rise in Asia. By comparison, the Indian rupee rose 2.40 per cent during the same period; the South Korean won 2.35 per cent; the Malaysian ringgit 2.20 per cent; the Philippine peso 1.62 per cent; the Vietnamese dong 0.66 per cent; the New Taiwan dollar 0.45 per cent; the Chinese yuan 0.40 per cent; and the Indonesian rupiah 0.05 per cent.
The Hong Kong dollar dropped 0.03 per cent; the Singapore dollar dipped 0.58 per cent; Brunei's dollar dipped 0.67 per cent; and the Japanese yen fell 6.88 per cent in the period.
According to an FTI survey released this week, the industrial sectors that have been hit hardest by the baht's rise include cosmetics, ceramics, shoes, leather, foods, jewellery and sugar. Sectors witnessing a medium impact include furniture and auto parts. Sectors experiencing no impact included plastics and electrical products.
FTI chairman Payungsak Chartsutipol said the government should closely watch major economies including the United States, the European Union and Japan, which have attempted to weaken their currencies to support exports.