Thai Government Asked To Urgently Attend To Baht Surge

[george]

Thai government asked to urgently attend to baht surge

BANGKOK: -- The Thai government should produce urgent measures to solve the baht surge before more private companies gradually shut their doors, the Thai Chamber of Commerce (TCC) warned.

TCC vice chairman Chatchai Boonyarat said the private sector realised it needed to adjust itself to the baht appreciation, and that the government must follow suit.

It could not be denied that it takes time for the adjustment, Mr. Chatchai said, but more importantly, the government should have efficient measures to manage the baht. It needs to take the correct action.

"We cannot survive no matter how smart we are for the adjustment if the government continues to let the baht appreciate so sharply like it is now," he said.

Mr. Chatchai said the private sector normally located new markets to position their products, but that government has a responsibility to manage an appropriate climate for business.

At present, more products are exported to Middle East countries or even Africa where competition is less fierce than that in Thailand's main existing destinations including the United States, Europe and Japan.

But exports of Thai products will be affected if the baht continues to fluctuate, he warned.

"In the past, the government might not know the private sector has suffered severely from the baht volatility," Mr. Chatchai said. "Now, it has understood what difficulties the private sector has experienced.

"If it continues to approach the problem without true understanding, many more factories will close and the unemployment will follow," he said.

--TNA 2007-07-20

[george]

Baht volatility brought up for hot debate in NLA

BANGKOK: -- The sharp appreciation of the baht became a hot issue raised for debate at the National Legislative Assembly meeting on Thursday as prominent members took turns to criticise the Bank of Thailand’s slow reaction to the problem and call for urgent governtment measures to address it.

Capt. Chitr Siratharanont, an NLA member, said the baht had strengthened by more than 7 per cent in the past six months and is expected to continue to surge in the future.

The baht closed at 33.50-33.51 to the dollar on Thursday.

He said the baht surge was attributed to the weakening greenback and speculation. It had adversely affected exporters and the government should urgently come to their rescue.

Capt. Chitr criticised the central bank for coping with the baht's volatility in a conservative manner and had failed to solve the problem soon enough. The baht surge had now reached a precarious point, he said.

The NLA member proposed five measures to the government for consideration, with adoption of an appropriate currency exchange rate policy which exporters could rely on for negotiating product sales as being of urgent priority.

Second, he called for allowing exporters to hold the foreign currencies for longer than 14 days or to deposit their funds in dollar denominations.

Prevening capital inflow for speculation is his thrid priority, to be achieved by requiring foreign investors to make fully hedged swap contracts.

Fourth, encouraging exporters to buy new machinery to improve production efficiency or purchase raw materials in advance by finding low-cost loan sources for them or offering Board of Investment’s investment promotions.

Capt. Chitr proposed holding international reserves in Japanese yen instead of dollars or to bring a certain amount for investment overseas or construction of mega projects.

NLA member Sangsit Piriyarangsan said some people suggested the government to take soft measures to cope with the baht volatility while others viewed it should take harsh measures to deal with it.

But in his view, the government first needed to find an exact cause of the baht surge.

He said he disagreed with the idea that central bank officials be solely responsible for the management of the currency volatility because the problem is more complicated now.

Mr. Sangsit also wanted the bank to urge state enterprises and private companies to help drain the dollar out of the Thai economic system.

In addition, the onshore and offshore markets should be merged into one to make it easier to manage the baht, he said.

--TNA 2007-07-20

[Jai Dee]

PTT Company to import over 20 billion baht in machinery to aid government in reducing baht appreciation

The PTT Company is expediting the importation of Natural Gas Vehicle equipment in order to assist the government in reducing the appreciation of the Thai Baht.

The Senior Executive Vice President of the PTT Company's Exploration and Production and Gas Business Group (กลุ่มธุรกิจก๊าซธรรมชาติ บริษัท ปตท.จำกัด(มหาชน)), Mr.Chitrapongse Kwangsukstith (จิตรพงษ์ กว้างสุขสถิตย์), revealed that the PTT Company is adhering to the government's policy for state enterprises to expedite the importation of machinery and products in order to assist the nation in reducing the appreciation of the Thai Baht. Mr.Chirapongse reports that the PTT Company's Exploration and Production and Gas Business Group will be expediting the importation of compressors, and high pressure NGV machinery worth over 1 billion baht, the importation of ethanol and natural gas differentiators worth over 10 billion baht, and the construction of a natural gas refinery worth over 20 billion baht.

The Senior Executive Vice President added that the PTT Company is currently expanding NGV service stations with aims to construct 137 stations by the end of 2007, and 535 stations by the end of 2011. The PTT Company also aims to increase the number of vehicles running on NGV from 37,485 to 60,850 by the end of 2007, and 256,000 by the end of 2011.

Source: Thai National News Bureau Public Relations Department - 20 July 2007

[Jai Dee]

Bt5-billion baht fund set up to help SMEs affected by strong baht

The government approved the set up of a special fund of five billion baht to release loans to small- and medium-sized enterprises (SMEs) affected by the strengthening of the baht.

Today (July, 20th) Deputy Prime Minister and Minister of Industry Kosit Panpiemrat (โฆสิต ปั้นเปี่ยมรัษฎ์) and Governor of the Bank of Thailand (BoT) Tarisa Watanagase (ธาริษา วัฒนเกส) have met with Prime Minister Surayud Chulanont (สุรยุทธ์ จุลานนท์) to report measures to deal with the baht appreciation.

Mr Kosit later tells the press that the government has accepted a proposal by the Federation of Thai Industries about the establishment of the five-billion baht fund aimed to assist SMEs in the export sector. Half of the fund or 2.5 billion baht will be provided by BoT and the other half by the Thai Bankers’ Association. More details of the fund will be announced after the Cabinet meeting on July 24th.

In addition, Mr Kosit says the government has accepted six from seven proposals of the private sector on solutions to the baht appreciation. The proposal rejected by the government concerns oil hoarding as it will increase oil prices and affect consumers.

At 16.00 hrs today, Minister of Finance Chalongphob Sussangkarn (ฉลองภพ สุสังกร์กาญจน์) is scheduled to join a meeting with the BoT governor on the baht crisis.

Source: Thai National News Bureau Public Relations Department - 20 July 2007

[Martin]

"The government approved the set up of a special fund of five billion baht to release loans to small- and medium-sized enterprises (SMEs) affected by the strengthening of the baht."

They will need to be careful to only grant these loans to firms that can demonstrate that their difficulties are only temporary, and that there is a realistic prospect of the firm being able to pay back the loan.

Any firm that is going to go on exporting to the US on $US dollar-demonitated contracts is a bad bet.

[Jai Dee]

Labour Minister affirms baht currency still manageable

Labour Minister Apai Chandanachulaka (อภัย จันทนะจุลกะ) affirms that the current appreciation of Thai baht is still steady the currency situation still reliable and the most manufacturers are ready to work without reducing the compensation rate.

Labour Minister Apai visited northern Thailand yesterday and today (Jul 19-20) to inspect the manufacturers and their financial liquidity. He says the currency situation has mostly affected ceramics and timber industries. He says the main issue is the production delay, and there are few problems with foreign market. Following his discussion with the entrepreneurs, he says they would like the government to extend the period of social security fund or readjust the fines. Hence, relevant agencies will have to look into their demands.

Mr. Apai says the industrial operators can seek assistance from the government.

Source: Thai National News Bureau Public Relations Department - 20 July 2007

[jayjayjayjay]

If the government want a hand in spending a few baht I for one volunteer to find a few items to buy offshore and import.........

[Mid]

Thailand’s Baht Soars Higher

Daniel Ten Kate

20 July 2007

Thailand’s rapidly rising currency not only leads the region but could force a domestic economic restructuring

Six months after Thailand's central bank triggered a one-day market collapse by imposing stringent capital controls to stem the surging baht, the currency continues to strengthen with no end in sight as the US dollar weakens. After rising nearly 14 percent from 41.07 to the dollar in January 2006, to 35.37 when the central bank intervened last December, the baht appreciated another 7 percent this year to hit 10-year highs of 33.47 this month.

asiasentinel.com

perspective ......................

[lazeeboy]

Thailand's Baht Soars Higher

Daniel Ten Kate

20 July 2007

Thailand's rapidly rising currency not only leads the region but could force a domestic economic restructuring

Six months after Thailand's central bank triggered a one-day market collapse by imposing stringent capital controls to stem the surging baht, the currency continues to strengthen with no end in sight as the US dollar weakens. After rising nearly 14 percent from 41.07 to the dollar in January 2006, to 35.37 when the central bank intervened last December, the baht appreciated another 7 percent this year to hit 10-year highs of 33.47 this month.

asiasentinel.com

perspective ......................

maybe they will have to take a few peopleoff the get taksin at all cost ,thus have the man power to sort it out

[figaro]

Can't understand why the Thai government doesn't loosen exchange controls and allow Thais to convert Baht to foreign currencies and invest abroad.

Wouldn't freeing exchange controls result in Baht outflows, and bring about a weaker Baht?

Government controls over currencies seldom work. Central Bank intervention is useless.