Gaining trade advantage not purpose of exchange-rate intervention, says BOT after US places Thailand on monitoring list
The US Treasury Department has placed Thailand on its list of countries being monitored for having a significant bilateral trade surplus with the United States – more than $20 billion (Bt600 billion) – and a material current account surplus (over 2 per cent of GDP), Chantavarn Sucharitakul, assistant governor for Communications and Corporate Relations Group at the Bank of Thailand (BOT), said on Thursday.
His statement came after the Treasury Department issued its "Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States" on Wednesday.
According to the report, Thailand has been put on the monitoring list.
The assessment has been conducted according to the framework and criteria provided under relevant legislation on foreign exchange practices of its major trading partners. Besides Thailand, the report says China, Japan, Korea, Germany, Italy, Singapore, Malaysia, Taiwan and India have also been included in the list of countries being watched.
At this stage, the assessment is not expected to have any material impact on Thailand’s international trade or foreign direct investment in the kingdom, Chantavarn said.
Similarly, the assessment does not impede BOT’s ability to fulfill its mandate on macroeconomic policies to safeguard domestic stability, she said.
BOT has been in close dialogue with the US administration to foster an understanding of Thailand’s macroeconomic and financial conditions. The central bank has also reiterated its commitment to exchange-rate flexibility and has conducted two-way intervention only to ride out the volatility of the exchange rate, she explained.
Meanwhile, BOT has ensured that Thailand has no intention to use the exchange rate as a tool to gain an unfair trade advantage or competitiveness over trading partners, Chantavarn made clear.
Thailand’s exporters have long complained that a stronger baht is affecting their exports and have urged authorities to make the currency weaker. After shooting up about 4 per cent in one month, the baht further appreciated today, breaking the 30-a-dollar level to Bt29 territory.
The US has also labelled Switzerland and Vietnam currency manipulators. This could lead to US sanctions against them.
