Thailand: BoT allays concerns over currency manipulation
The Bank of Thailand affirms that it has not manipulated the baht through foreign exchange intervention to gain a trade advantage.
Thailand’s central bank continues to inform and talk with the US Treasury Department about global capital movement and Thailand’s current account surplus, said Chantavarn Sucharitakul, assistant governor for the communications and corporate relations group.
The central bank has to manage the foreign exchange rate on occasions when offshore flows immediately move into Thailand’s financial market, in accordance with investment reviews of foreign investors in the world’s key economies, Mrs Chantavarn said.
“The Bank of Thailand has always reiterated that our transactions in the foreign exchange market have no objective in distorting the baht’s value to gain a trade advantage against Thailand’s partners,” she said. “This is reflected in the baht’s movement during the previous period, when it moved in a two-way direction, appreciation and depreciation, rather than moving in either direction.”
Transactions in the foreign exchange market of the central bank also moved in a two-way direction, buying and selling foreign currencies in line with a rapid and volatile movement of capital flows, Mrs Chantavarn said.
The central bank’s latest comments came after a UBS Group report suggested that Thailand and Taiwan could be added to the US watchlist for currency manipulation after meeting all the criteria set out by the Treasury Department.
A country is included in the monitoring list if it fulfils two of three benchmarks: a trade surplus with the US of at least US$20 billion; a current account surplus of at least 2% of GDP; and persistent, one-sided intervention in the currency equivalent to 2% of GDP in six months of a year.
Taiwan, which dropped off the US monitoring list in 2017, and Thailand now fulfil all three criteria, according to UBS. Neither were included in the US Treasury’s January findings.
Separately, acting Finance Minister Santi Promphat said the selection committee has chosen the new Bank of Thailand governor and the candidate will have to be endorsed by the cabinet.