Bank of Thailand to Take Further Steps to Reign in Thai Baht

Thailand’s central bank has reported that is ready to take additional steps to rein in the skyrocketing Thai baht.

The Bank of Thailand and the government remain concerned about the baht’s appreciation and continue to discuss the issue, Deputy Governor Mathee Supapongse said told reporters in Bangkok Tuesday.

The bank’s foreign-exchange intervention has helped to boost reserves and curb the baht, Bloomberg reports.

The Bank of Thailand has taken several steps in recent months to limit gains in the baht. Especially after it surged almost 9% against the dollar in 2019, the best performer among Asian currencies. The strong currency has hurt the nation’s exports, prompting calls for further action from the government.

Mathee said it’s not the central bank’s job alone to manage the baht
“The central bank is like the last door to defend the baht,” he said. “The first door is the private sector and the second door is the government. We all need to help out.”

If the central bank is left to solve the baht problem on its own, “they will need to use strong medicine to handle it,” said Mathee. “And it may not benefit much. If all parties help, they can use milder measures which will benefit all parties.”

He added the central bank will take action if it sees currency speculation. Separately, the bank published a foreign-exchange code of conduct on its website, outlining ethical and governance practices for market participants.

BOT Governor Veerathai Says Thailand To Ease Capital Outflow Rules Again
Governor Veerathai Santiprabhob said last week the central bank will relax restrictions on capital outflows again, in an effort to ease upward pressure on the baht. Those steps includes boosting the amount of proceeds exporters can hold overseas to $1 million.

Finance Minister Uttama Savanayana said Monday any steps authorities take to curb gains in the currency won’t disrupt the “market mechanism” of the baht.

Some of the steps already taken by the central bank include:

Interest rates cut twice last year to match a record-low 1.25%
In July, measures were imposed to counter short-term inflows
In November, rules on capital outflows relaxed

The government also plans to issue measures to boost imports on capital goods and machinery for investment to help reduce pressure on the baht.

Source - Chiang Rai Times

Thailand’s Prime Minister Orders Quick Action on Thai Baht

Thailand’s Prime Minister Prayut Chan-o-cha has ordered authorities to immediately stabilize the baht value and control its rise. He also ordered the Finance Ministry to form a new committee for the task.

Finance Minister Uttama Savanayana said Gen Prayut made the order as baht appreciation was affecting exporters. Many groups of operators in exports and tourism has pressured the PM over the soaring baht.

There will not be any order for a particular direction of the baht value, Mr Uttama said. That is the responsibility of the Bank of Thailand. The new committee idea will be proposed to a meeting of economic ministers. It will be a forum for organizations to exchange information,” he said.

The Finance Ministry will form the baht stabilization committee together with the Bank of Thailand; the National Economic and Social Development Council; the Office of the Insurance Commission; and the Stock Exchange of Thailand.

The Finance Ministry also plans to set up another committee to implement national strategies. Concerning small and medium-sized enterprises, start-ups and the grassroots economy. Furthermore so that the strategies would significantly boost the economy.
Central Bank Trying to Curb Baht

Thailand is trying to coax the baht down from six-year high territory as the currency’s strength threatens local manufacturing and tourism.

The central bank has cut interest rates and eased capital controls to rein in emerging Asia’s best-performing currency this year.

It is an ironic twist for a country that became the epicenter of the 1997 Asian financial crisis after its currency collapsed. Thailand now finds that its relatively sound fundamentals have made it a safe haven for capital in Southeast Asia.

The bank cut its benchmark one-day repurchase rate to 1.25%, tying an all-time low, while also making it easier to take funds out of the country.

Source - Chiang Rai Times
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Cambodia - Central bank links up for Thai pay system

The Kingdom’s central bank unveiled plans on Wednesday to collaborate with its counterpart in neighboring Thailand to launch a QR code payment system, a bank official said.

The system, which would allow people from either country to rapidly send funds to one another, is aimed at those who travel often for business or tourism.

An announcement from the National Bank of Cambodia (NBC) said it would let users bypass the need to use costly exchanges to turn Cambodian riel into Thai baht, or vice versa.

The systems will also allow Cambodian workers in Thailand to transfer money to their families at home.

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 The NBC’s director-general of central banking, Chea Serey, said the initiative will receive support from financial institutions in both countries and that leaders would meet up later this year to define rules and procedures.

She said the system was set to go public next year.

“This is another effort to promote the use of riel. [It] will allow Cambodians to use their own currency abroad and will prove to the public that it is internationally recognised,” she said.

The system will only work for users whose bank accounts utilise Cambodian riel, and aims to be a catalyst to boost riel usage.

Cambodian imports accounted for $15.5 billion in total last year, in which the imports from Thailand was 16.5 per cent of total imports. It is second only to China, whose products account for 41.7 per cent of imports to the country.

In September of last year, the NBC signed an agreement with the People’s Bank of China in Guangxi to set up an official yuan-riel exchange rate, allowing businesses to conduct settlements without having to use the US dollar.