Commerce Ministry wants more transactions in baht instead of dollars
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The Commerce Ministry will urge companies to transact overseas business more in baht, particularly for cross-border trade, to offset losses from the currency's rise against the US dollar.
“Because of the baht’s appreciation that creates a lower return for exporters, they will force farmers to purchase goods at low prices and that will end up hitting local farmers hard,” permanent secretary Vatchari Vimooktayon said yesterday.
The ministry reported that exports last month improved 10.52 per cent to US$18.69 billion, or 5.37 per cent Bt543.7 billion in baht terms.
Exports in the first four months grew 5.74 per cent to $75.66 billion, or only 1.6 per cent to Bt2.24 trillion.
The strong performance was attributed to a low base in April last year. Industrial exports climbed by 9.4 per cent, but farm goods and agro-industrial products declined 2.8 per cent.
If government agencies have no plan to solve the baht problem, shipments this year could even miss the recently reduced target of 7-7.5 per cent to between $245 billion and $246 billion this year.
About half of cross-border trade is conducted in baht. Traders can save conversion costs by using their country’s currency instead of other currencies, she added.
Niyom Wairatpanij, chairman of the border-trade committee of the Thai Chamber of Commerce, said that to encourage more traders to accept baht, the government needs to accept neighbouring countries’ currencies.
The government should promote some measures to facilitate the growth of border commerce, such as upgrading temporary checkpoints into permanent passes and encouraging more banks to open in neighbouring countries.
The ministry forecasts cross-border trade to expand 30 per cent to Bt1.2 trillion this year, but Niyom expects only 10 per cent because of the pricier baht.
The ministry also reported that imports in April rose 8.91 per cent to $21.55 billion, or 3.88 per cent to Bt634 billion, and in the first four months increased 8.56 per cent to $86.42 billion, or 4.55 per cent to Bt2.59 billion.
Thailand has locked in a higher trade deficit of $10.76 billion or Bt353.89 billion in the first four months of the year.
