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Thai private sector pushes harder for government economic action
By English News



BANGKOK, May 3 – Thailand’s leading industrialists today renewed pressure on the government, calling for measures to rein in the baht’s appreciation, cut the policy interest rate and stem foreign capital inflows.

Payungsak Chatsuthipol, Federation of Thai Industries (FTI) chairman, said after submitting a letter to the prime minister that the rocketing baht has compelled some industries to import parts to reduce production costs – an act which may inflict damage to the domestic supply chain.

The exchange rate at Bt29 against the dollar may reduce the targeted export growth at 8-9 per cent to 4-4.5 per cent and the impact will be visible in Q2-Q3 as exporters could not set their product prices given the volatile baht, he said.

He urged the prime minister to cement cooperation between the Finance Ministry and the Bank of Thailand (BoT) and called on the Monetary Policy Committee (MPC) which normally meets every 6-8 weeks, to convene in a special discussion in light of the critical economic situation.

Stressing the FTI’s request for an interest rate reduction, Mr Payungsak said, “If the MPC finds the FTI’s earlier call to lower the interest rate by 1 per cent too harsh, it may choose to reduce only a little in combination with the Finance Ministry’s tax measures,” he suggested. The current policy interest rate is 2.75 per cent.

The baht’s strength may bounce back now that the Central European Bank announced reducing the interest rate by 0.25 per cent – a move which will possibly stimulate capital inflows into Asia, he said.

The baht has appreciated 6.28 per cent since early this year, a reversal from the Japanese yen which depreciated 45 per cent and Korean won which has slightly weakened by 7 per cent, the FTI chairman said, adding that the private sector wants the baht’s movements to be stable and in line with other regional currencies.

The FTI will give the government a few weeks to tackle the baht and interest rate policies after which industrialists will decide on the next move if state agencies concerned fail to take concrete action.

In the letter to the premier, the FTI urged the government to adopt a crisis management approach to the exchange rate, switch from an inflation-targeting policy to include the exchange rate, speed up interest rate reduction, impose stricter measures on capital inflows and outflows, and adjust the BoT’s policy on issuing bonds. (MCOT online news)


-- TNA 2013-05-03

[JetsetBkk]

Is it wrong to hope for another 1997?

[Robby nz]

the BoT’s policy on issuing bonds

Isnt it the finance ministry that is issuing the inflation proof bonds not the BOT?

with the Finance Ministry’s tax measures

As I understand it from previous news items the Finance ministry has not been collecting taxes and fees which has made the situation worse.

[Bellweather]

I'm not surprised the industrialists are getting but hasn't PTP made it perfectly clear they are only interested in one issue and nothing else matter until that is sorted out to their leaders satisfaction ?

[Bellweather]

I'm not surprised the industrialists are getting but hasn't PTP made it perfectly clear they are only interested in one issue and nothing else matter until that is sorted out to their leaders satisfaction ?

It should read - " are getting twitchy ... "

[surangw]

its the same system as dealing with whores, if they want action, they have to pay for it.

[Joe Mamma]

Sounds like the HAVES don't want the have-nots to get a fair shot at making a living. That kind of selfish,short termed thinking is prehistoric and stupid!

[Locationthailand]

I would think the industrialist can holler all they like, BoT will do what it wants when it is ready. If nothing else, rather than try to manipulate markets et al, let there be a levelling of the playing field. Seems with so many Mercedes Benz' and pointy nosed branded sports cars flashing around, now we have "We are a successful country but we want to retain our 3rd world status?"

[OzMick]

Sounds like the HAVES don't want the have-nots to get a fair shot at making a living. That kind of selfish,short termed thinking is prehistoric and stupid!

There's an 800lb gorilla in the corner called Rice Scam. Stocks keep going up because everybody wants to grow, the stock continues to rot, and the baht appreciation makes over-priced rice even more expensive. When the scam collapses so will the price,Thailand will have huge stocks of low-value rice, and few will be interested in buying more from farmers. At that time the Have-Littles will become the Have-Nots (with debt).

Best to just ignore him and hope he goes away.

Edited May 4, 2013 by OzMick