Mof Downplays Concern On Steep Baht Appreciation

[george]

MOF downplays concern on steep appreciation of baht

BANGKOK: -- Finance Minister Somkid Jatusripitak yesterday brushed aside a mounting concern over a steep appreciation of the baht, saying that he had instructed senior officials concerned at the ministry and the Bank of Thailand (BOT) to closely monitor the movement of the Thai currency.

Speaking after a meeting with top officials of the ministry, the BOT, the National Economic and Social Development Board (NESDB), and the Bureau of the Budget, he said the current baht movement was raised for wide discussions since it had continued to strengthen against the US dollar.

BOT’s Governor M.R. Pridiyathorn Devakula told the meeting that although the baht had recently appreciated sharply, it had moved in the same direction with other regional currencies.

Dr. Somkid said the government would not attempt to intervene in the baht movement against the global trend.

However, the government would neither allow the local currency to strengthen to such an extent that the country loses its trade competitiveness, he stressed.

“What we will focus on is the stability of the baht to ensure we won’t be put at disadvantage in terms of trade. However, the current level of the baht remains not of concern,” he said.

The finance minister added that the meeting also discussed ways to prepare the government's mid-year central budget in 2005 for CEO governors so that they could use for the development of their respective provinces under a strategic plan made two years ago.

He reiterated that the revenue collection in the fiscal 2005 would definitely exceed what was earlier target by at least 40 billion baht.

--TNA 2004-11-30

[marquess]

I really don't know what the paranoia is about, it has only appreciated by about 2% against the dollor. If I were the Australian trade minster I would be worried, as the currency has appreciated 27% in less than two years against the US dollar. Realistically the Thai Baht should be about 36 to the dollar, if it were not unofficially pegged to the greenback.

[ovenman]

BOT’s Governor M.R. Pridiyathorn Devakula told the meeting that although the baht had recently appreciated sharply, it had moved in the same direction with other regional currencies.

The movement of the baht might be a cause for concern if it's out of line with other comparable currencies. It seems like this same story gets printed every time the baht moves in one direction or the other.