Baht Appreciation Begins Affecting Thai Industry

[george]

Baht appreciation begins affecting Thai industry

BANGKOK: -- Thailand’s Deputy Prime Minister and Industry Minister Kosit Panpiemras on Monday conceded that the recent baht appreciation is to be considered as unusual, and that it had begun to

impact negatively on the Thai industrial sector.

He said the sharp baht appreciation due to an influx of foreign funds at present is not the normal phenomenon, and that many industries had begun to feel the pinch as entrepreneurs admitted it was hard for them to adjust themselves to the situation.

Mr. Kosit said it is a duty of the Bank of Thailand to respond to the volatility of the baht and supervise its defence, since it is well equipped to do that.

He believed the BoT would be able to cope with the baht's fluctuation because it had complete data and measures in hand to do it.

Mr. Kosit said business operators, regardless of the small- and medium-sized enterprises (SMEs) and major entrepreneurs, still needed to adjust to protect their competitiveness in world markets.

Currently, he said, a large amount of foreign investment had flown into Vietnam, as had previously occurred in Thailand in the past because the country has advantages in terms of labour wages and natural resources.

Operators in the Thai industrial sector must attempt to upgrade their operations and avoid competing in markets where they are put at disadvantage, he said.

Overall, he said, the capital influx into Vietnam could benefit Thailand since both countries had good relations and could boost their trade cooperation.

Mr. Kosit urged both the public and private sectors to cooperate in developing the quality of Thailand's manufactured goods, to ensure they could grow efficiently and compete in a sustainable manner.

"This government does not want to use the market policy to sell any projects. What it wants to do is to build the country's economic stability," he said.

--TNA 2006-12-18