MPC prefers policy mix to handle baht
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The Bank of Thailand's Monetary Policy Committee (MPC) has agreed on the need for a timely implementation of appropriate policy mix, to manage the exchange rate.
In a statement released today, the MPC said that the policy mix "as warranted by circumstances" will be implemented "in close coordination with the Ministry of Finance and other agencies."
The MPC expressed concern over recent volatility and rapid appreciation of the baht, which, at times, have not been justified by economic fundamentals.
The decision was announced after the regular monthly macroeconomic briefing today, where they discussed recent exchange rate developments.
The MPC has been closely monitoring recent baht appreciation and assessing its implications for the Thai economy. The committee judges that recent gain in baht is largely
attributable to foreign investors’ confidence in the strength of the Thai economy. On the positive side, the baht appreciation has been conducive to business investment to enhance
their productivity. However, the stronger baht also has negative impact on exporters, particularly small and medium sized firms as well as those that rely heavily on domestic raw
materials, agricultural products, and labour. Nonetheless, the export sector’s continued structural and productivity improvements have helped alleviate the adverse impact to some
extent. Overall, despite exchange rate appreciation, the committee expects the Thai economy to remain resilient, which is in line with other agencies’ assessments.
