By www.CentralBankNews.info Thailand’s central bank is worried over the rapid rise in the value of its bath currency and will take action – as yet unspecified – together with the Thai finance ministry when needed.
The Bank of Thailand (BOT) said the rise in the baht was “largely attributable to foreign investors’ confidence in the strength of the Thai economy” and this had spurred businesses into raising their productivity, the BOT said in a statement following a regular macroeconomic briefing of its Monetary Policy Committee where exchange rate developments were discussed.
However, the rise in the baht has also had a negative impact on Thai exporters, particularly small and medium-sized firms, the BOT said, adding that “despite the exchange rate appreciation, the committee expects the Thai economy to remain resilient.”
“The MPC expressed concern over recent volatility and rapid appreciation of the baht, which, at times, have not been justified by economic fundamentals,” the BOT said, adding:
“The committee therefore agreed on the need for a timely implementation of appropriate policy mix as warranted by circumstances, in close coordination with the Ministry of Finance and other agencies.
The Thai bath rose by close to 7 percent against the U.S. dollar early this year but then declined early last week following speculation in foreign exchange markets that the BOT would intervene.