BOT says no threat to foreign reserve from strengthening dollar
The Bank of Thailand (BOT) says it is not worried by the falling value of its foreign exchange reserve due to impact from the strengthening dollar.
On Saturday, BOT deputy governor Mathee Supapongse said the central bank had diversified risks by holding many currencies.
"Thailand is still very strong in terms of foreign exchange stability," he said, adding that this was not a worrisome issue.
He said Thailand had the world’s 12th largest proportion of foreign exchange reserve, higher than the US, European states and many other countries.
The BOT’s reserve of US$240 billion reflected Thailand's foreign exchange stability and helped to boost confidence among investors, he added.
The baht has plummeted 11.7 per cent to a 16-year low against the dollar this year.
Meanwhile, raising the Thai policy interest rate to 1 per cent had not caused the currency to weaken, Mathee said. He cited South Korea, where the won has weakened more than the baht despite the country’s 2.5 per cent interest rate.
The BOT has hiked the interest rate twice in recent weeks to curb inflation.
Thailand has attracted about 150 billion baht in foreign inflows this year despite the wide difference in Thai and US interest rates. However, foreign investors have also sold about 33 billion baht in Thai bonds.
Mathee said the BOT will continue to monitor currency market volatility to ensure the baht does not weaken against the currencies of regional neighbours and emerging economies.
The baht opened at 37.93 to the US dollar on Friday, strengthening from Thursday’s close of 38.06.