Baht moving beyond fundamentals: BOT
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The Thai baht is advancing well above its fundamentals, conceded Bank of Thailand Governor Prasarn Trairatvorakul on Friday.
At 8.18am, the currency hit a new 16-year high at 28.71 per dollar, gaining 2.02 per cent from end-March, according to Bank of Thailand data. At one point, it touched 28.68. This indicates the 6 per cent increase from the end of last year.
Month to date, the currency also gained 6.40 per cent against Japanese yen, at 29.26 per 100 yen. It also appreciated by 0.17 per cent against euro to 27.478.
Prasarn said today that the currency is strengthening above the economic fundamentals.
He did not elaborate further or mention any measure the contain the appreciation.
Prasarn had a meeting with the prime minister and economic government units on April 18. He said that the agenda was mainly about the export target, not about the exchange rates.
During the Nation Group-hosted debate on Thursday night, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong conceded that he has thought about dismissing the central bank governor everyday, following the failure to heed his concern over the baht appreciation.
Kittiratt said that if actions (policy rate cuts) were taken when the baht was still at 31 per dollar, the situation would not have been this grave. Now, he said the policy rate can help slow down inflows only when it is slashed as much as 1 percentage point.
Former prime minister Abhisit Vejjajiva commented that Kittiratt did not honour the central bank's independence and this could shake public confidence. He suggested that both sides should urgently seek a compromise on their different views on the policy rate.
