Prime Minister Yingluck Shinawatra has instructed appropriate agencies to seek measures to help exporters affected by the ongoing appreciation of the baht.
The Prime Minister said that the impact of the stronger baht was an important issue and that officials involved must take action to assist those suffering from the impact.
In order to cope with the situation, the Prime Minister will call meetings with responsible agencies periodically to discuss ways to deal with the problem. The stronger baht will make Thai products more expensive for overseas buyers.
She believed that if all parties joined hands in handling the issue, the crisis from the strong baht would ease. Asked whether the Government would intervene or not, she said, it is the duty of the Bank of Thailand to take care of the baht value.
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said that the Government had set the export growth target at 9 percent in 2013. It needs to keep a close watch on the movements of the foreign exchange market to ensure that the set target will be achieved and Thai products remain competitive in the international market.
He believed that if the baht did not strengthen rapidly, the export sector would be able to continue to grow. In this regard, the Ministry of Finance and other relevant agencies would closely monitor exchange rates.
The Director of the Center for Economic and Business Forecasting, University of Thai Chamber of Commerce, Dr. Thanavath Phonvichai, said that a survey conducted by the University of Thai Chamber of Commerce shows that the appreciation of the baht has led to a decline in Thai exports. According to the survey, 42.1 percent of business operators said that the stronger baht has affected their operations at a high level, resulting in a drop in orders and profits, while 31.6 percent consider the impact moderate. Most of them agreed that the baht should be traded at 30.48 per US dollar. The rate of 29.18 baht per dollar is still acceptable.
The survey also indicates that if the baht strengthens further, some businesses might have to lay off workers. Business operators want the Government to look into this issue by reducing the money exchange fee, bringing down the interest rate, and controlling capital inflow to ensure financial stability. If the baht strengthens to 27 per dollar, the export growth target is likely to drop to only 3 percent.
Mr. Paiboon Kittisrikangwan, Assistant Governor of the Bank of Thailand, stated that the private sector needs to adjust to the new situation. An assessment would be made on the necessity of measures to deal with the situation, since certain measures would produce long-term impacts. He reaffirmed that the current monetary policy rate at 2.75 percent per annum remains favorable to the expansion of credit and the growth of the Thai economy.