Monetary policy review urged
Private enterprises have urged the government and the Bank of Thailand to review the country's monetary policy given the global currency wars and the resulting higher level of competitiveness in international trading.
However, the government believes the weakening Vietnamese dong and Chinese yuan have not yet affected Thailand’s trading competitiveness as most Thai products have a competitive edge.
Poj Aramwatananont, president of the Thai Frozen Foods Association, said due to the slowing down of global economic growth, many countries have focused on weakening their exchange rate so their exports are more attractive.
"Now, they can be called currency wars as many countries have focused on monetary policies. Thailand, which also relies largely on exports, should review our monetary policy to ensure competitiveness and strong export growth," said Poj.
He said that following the weakening of the yuan and dong, Thai exporters are very concerned that both currencies will be devalued further and will hurt Thai exports in some industries since China and Vietnam are Thailand’s major export rivals.
Pornsil Patchrintanakul, adviser to the Thai Chamber of Commerce, said the Bank of Thailand needs to closely monitor the dong as Vietnam is a serious trading competitor for many Thai products, mainly agricultural products, especially rice.
"The price difference between Thai and Vietnam rice will be wider, and Thailand may lose its competitiveness in some markets that prefer cheap rice," said Pornsil.
According to the Thai Rice Exporters Association, as of Wednesday, the price of 5 per cent Thai white rice was US$370 (Bt13,000) a tonne, while the price of 5 per cent Vietnamese white rice was $340 a tonne.
However, Apiradi Tantraporn, who was promoted from deputy commerce minister to commerce minister in the Cabinet reshuffle, said the devaluation of the dong should not yet have affected Thai exports.
She called for private enterprises not to worry about the weakening exchange rates of some countries since those countries have done so in an attempt to stabilise economic growth.
"The Thai baht has weakened about 10 per cent since early this year and now it is quite stable and at an appropriate rate," she said.
"The Bank of Thailand is already closely monitoring the currency moves. Traders should not be too concerned about the weakening dong or yuan."
Apiradi also said Thailand and Vietnam mostly exported to different markets, with the Kingdom’s goods chiefly going to high- and middle-tier markets and Vietnam goods primarily being bought by lower-tier markets.
If Thai manufacturers and exporters focused on the high-tier markets and high quality, Thai products would maintain their competitiveness in global trading, she said.
