Exim Bank extends help to euro crisis-hit exporters
The Export and Import Bank of Thailand has launched measures to help exporters who are affected by the euro crisis.
As the Euro Area financial market has witnessed tight liquidity, some importing companies in the area have delayed payment. Among the measures, Exim Bank is cutting the penalty rate for exporters and export paper discount rate, as well as providing export credit insurance as well as risk evaluation services.
Kanit Sukonthaman, president of the bank, said that through the risk evaluation services, exporters will be notified of the buyers' financial position and can accordingly set the appropriate payment term.
The bank also came up with four suggestions for all companies trading with European counterparts, to prepare for negative risks.
1. They should strictly honour the specification of products specified in the orders, to narrow the chance of product or payment rejection. They should also introduce products in smaller packages, launch more creative products and search for new markets.
2. On payment risks, they should buy export credit insurance for all orders.
3. On volatile exchange rates, they should buy hedging contracts and match revenue with expenses.
4. On volatile prices of raw materials, they should efficiently manage cost and inventory by searching for new suppliers, strike contract farming deals, or sourcing raw materials from countries with weaker currencies.
"The euro crisis is orginated by problems in PIIGS countries - Portugal, Ireland, Italy, Greece and Spain. Though they are not major trade partners as Thailand reaps only 1.6 per cent of export value from the countries, but the region's high interconnectedness sparks the contagious effect and this would hurt the Thai export sector," Kanit said.
