Central bank says only the market can move the Thai currency
Staying true to sound financial principles, Thailand’s top central banker said that the institution will allow market forces to determine the trading value of the Kingdom’s currency despite its recent fall and rising inflation.
Bank of Thailand Governor Sethaput Suthiwartnarueput said on Monday that the bank will let the baht, the Kingdom’s currency, move with market forces. The bank would only consider intervening in the currency market if a situation of excessive volatility arose.
That approach adheres to what global financial and monetary experts regard as responsible currency management.
Recently the trading value of the baht slumped to its lowest level in six years. Sethaput added that the currency’s fall is overwhelmingly the result of external factors rather than any internal economic difficulties. Most of Thailand’s exporters are content with the weaker baht as it makes their products and services more competitive in overseas markets. And the Kingdom’s exports have been performing well.
Although importers and investors have been adversely affected by this because it is more expensive for them to bring materials and goods into the country, and acquire companies or expand operations internationally, the current currency situation may only be short-lived.
The Ministry of Finance mentioned last week that it expects the baht to strengthen during the second half of this year. The reason for that will be an improvement or reduction in the Kingdom’s current account deficit. The current account should improve with the growing influx of foreign tourists now that pandemic restrictions have been lifted.
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