(01/05/2013)
The Monetary Policy Committee has expressed concern over recent
volatility and the rapid appreciation of the baht. Despite exchange rate
appreciation, it expects the Thai economy to remain resilient, which is
in line with other agencies’ assessments.
The Monetary Policy Committee on 30 April 2013 attended a
regular monthly macroeconomic briefing, organized by the Bank of
Thailand, and discussed recent exchange rate developments.
According to its statement, the Monetary Policy Committee has been
closely monitoring the recent baht appreciation and assessing its
implications for the Thai economy. The committee sees that the recent
gain in baht is largely attributable to foreign investors’ confidence in
the strength of the Thai economy.
On the positive side, the baht appreciation has been conducive to
business investment to enhance their productivity. However, the stronger
baht also has negative impact on exporters, particularly small and
medium-sized firms and those that rely heavily on domestic raw
materials, agricultural products, and labor.
Nonetheless, the export sector’s continued structural and productivity
improvements have helped alleviate the adverse impact to some extent.
Recent volatility and rapid appreciation of the baht at times have not
been justified by economic fundamentals.
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.
Another statement, issued by the Bank of Thailand, said that the Thai
economy in the first quarter of 2013 stabilized at a level comparable to
the previous quarter. Private spending continued to be the key driver
of economic activities, and tourism was buoyant.
Meanwhile, merchandise exports gradually recovered in line with a
stabilizing global economy. On the stability front, unemployment was
kept low, and inflation moderated. The currency appreciated from a
surplus in the current account coupled with strong capital inflows in
the form of direct investment and debt security investment by
non-residents.
A report from the Office of the Board of Investment (BOI) indicates that
investment in Thailand has continued to grow. Between January and March
2013, a total of 610 projects, worth 275 billion baht, sought BOI
promotional privileges. The number represented an increase of 38 percent
over the same period of 2012. The value accounted for an increase of
24 percent. Most of the projects involve services, public facilities,
agro-industry, and automobiles and auto parts.
Foreign direct investment during the period rose by 8.3 percent, with
338 projects worth 157.67 billion baht. In terms of value, it increased
by 17.5 percent. Japan remained the largest group of foreign investors
in Thailand during the three-month period, followed by Malaysia, Hong
Kong, the Netherlands, and Singapore.
On 15 April 2013 H.E. Lt.Cdr. Itti Ditbanjong, Ambassador of the Kingdom
of Thailand to the Russian Federation and the officers from the Royal
Thai Embassy welcomed Prof. Emeritus Dr. Direk Lavansiri, Chairman of
the Energy Regulatory Commission of Thailand and the delegation from the
Energy Regulatory Commission, who visited Russia from 14-17 April 2013
for a study visit in the fields of electricity energy regulatory policy
and management as well as electricity generating policy. The delegation
visited the MOSENERGO Power Plant, the Federal Tariff Service and
GAZPROM company. The study visit will contribute to the promotion of
further cooperation between Thailand and Russia in the field of
electricity energy regulatory management.
