Thai businesses urge c. bank to stabilise baht

Thai businesses are calling on the central bank to take action to stabilise the local currency, which has appreciated rapidly and could negatively impact fourth-quarter growth, Reuters reported on Monday.

The baht’s strengthening has been a concern for Thai exports and tourism, both key drivers of the economy. The Chamber of Commerce has highlighted the immediate impact on export competitiveness, particularly in agriculture and food products.

The chamber has urged the central bank to oversee the baht’s stability to ensure it aligns with global and domestic economic conditions. On Monday, the baht traded at its strongest level in more than 19 months, hovering around 32.8 to the US dollar.

The chamber’s chairman suggested that an appropriate level for the baht would be 34 to the dollar. He also called for a meeting with the central bank and finance ministry to discuss economic stimulus, interest rate reduction, and debt resolution.

Thai household debt has reached a high of $484 billion, representing 90.8 per cent of gross domestic product (GDP), making it one of the highest ratios in Asia.

While the Bank of Thailand (BOT) Governor acknowledged the baht’s strength and volatility, he stated that it has not significantly impacted exports. The BOT aims to ensure that the baht remains stable and avoids excessive fluctuations.

In light of the new government’s policies to revive the economy, the chamber of commerce has revised its 2024 growth forecast upward from 2.5 per cent to a range of 2.6 per cent to 2.8 per cent.

Stimulus measures are expected to contribute 0.2 to 0.3 percentage points to this growth.

Attribution: Reuters

Subediting: M. S. Salama