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Thailand: BoT vows steady forex
The Bank of Thailand vows to closely monitor baht volatility to maintain the competitiveness of the country’s imports and exports amid an economic recovery.
The central bank is watching baht movement after the local currency had volatile swings against the dollar compared with regional currencies. The movement was attributed to investor adjustment to the US Federal Reserve’s policy rate following better than expected US economic data, said central bank assistant governor Chayawadee Chai-Anant.
The Bank of Thailand announced on Tuesday the baht appreciated by nearly 5% compared with the dollar as of Jan 23 this year, ranking as the most volatile in the region.
The baht then weakened by nearly 2% to the dollar as of Feb 23, second to the Korean won.
Inflation in the US has been steady, meaning US interest rates are expected to continue increasing, she said. Given this scenario, the dollar has strengthened, including against the baht.
“The central bank will continue to monitor the local currency to ensure the competitiveness of Thai imports and exports. However, baht volatility is unlikely to affect import and export volume,” said Ms Chayawadee.
The Bank of Thailand reported the Thai economy improved in January from the previous month.
The baht appreciated against the dollar as investor sentiment improved given the Thai tourism recovery, partially attributed China reopening faster than anticipated.
She said the value of merchandise exports, excluding gold and after seasonal adjustment, increased slightly in January from the previous month, in line with improving activities in the manufacturing sector.
However, export value in January declined 3.4% year-on-year, though it grew 0.8% month-on-month.
Thai exports would continue to be pressured by the global economic slowdown in the first and second quarters, said Ms Chayawadee. However, the global economy is expected to pick up in the third and fourth quarters of the year.
“The central bank is scheduled to review the 2023 Thai growth rate next month. A global economic recovery and lower than expected Thai GDP in the fourth quarter last year will be considered in the review,” she said.
Ms Chayawadee said foreign tourist arrivals, after seasonal adjustment, totalled 2.14 million in January, slightly lower than 2.24 million the previous month. The figure was attributed to fewer Indian arrivals.
Chinese arrivals picked up significantly after Beijing ended its quarantine measures on Jan 8.
Tourist figures from other source markets also increased, including from Malaysia and Europe.
According to the central bank’s statement, Thailand’s economy is expected to grow 3-4% this year, following a sustained recovery path despite a global slowdown, with tourism and private consumption the key drivers.
The central bank previously assessed the country’s GDP growth rate at 3.7%, with the tourism sector the main contributor.
Source: https://www.bangkokpost.com/business/2517384/bot-vows-steady-forex