PUBLISHED : 23 Sep 2024 at 14:10
Thai businesses are urging the central bank to implement measures to stabilize the baht, which has seen a rapid appreciation that may threaten fourth-quarter economic growth, according to officials from the Thai Chamber of Commerce.
Deputy Chairman Phot Aramwattananon highlighted the faster-than-expected strengthening of the baht, which is adversely affecting both exports and tourism—two critical sectors of Thailand’s economy that have been struggling post-pandemic.
The immediate effects of the baht’s strengthening are already apparent, particularly impacting the competitiveness of exports, especially in agriculture and food products, as noted in the chamber’s recent statement.
The Bank of Thailand is urged to ensure the baht remains stable in accordance with both global and domestic economic conditions.
Currently, the baht is trading at approximately 32.8 to the dollar, marking its strongest position in over 19 months, and has surged by 13% against the dollar since hitting a low of 37.17 in April.
The chamber suggests that an appropriate exchange rate would be around 34 baht to the dollar, and it is seeking discussions with the central bank and finance ministry regarding economic stimulus measures, potential interest rate cuts, and strategies to address national debt.
This year, household debt in Thailand is around 16 trillion baht, equating to 90.8% of the nation’s GDP, one of the highest ratios in Asia.
Bank of Thailand Governor Sethaput Suthiwartnarueput indicated on Friday that the central bank is closely monitoring the baht, which is exhibiting strength and volatility partly due to a weaker U.S. dollar.
He noted, however, that the strength of the baht has not significantly impacted exports, although the bank is keen to prevent excessive volatility.
Furthermore, the chamber revised its 2024 economic growth forecast upward, now estimating growth between 2.6% and 2.8%, a slight increase from the previous 2.5% projection, largely due to new government policies aimed at economic revitalization.
Expected stimulus measures could contribute an additional 0.2 to 0.3 percentage points to overall growth, according to experts from the University of the Thai Chamber of Commerce.
