Trade board to meet central bank to discuss impact of stronger baht
Officials from the Board of Trade will meet with the Bank of Thailand (BOT) on August 8 to discuss the baht’s appreciation against the US dollar and yuan and its impact on the country’s exports, the board’s vice chairman, Sanan Angubolkul, told The Nation on Tuesday (August 6).
“Since early this year the baht has appreciated by up to 5 per cent against the US dollar, which has led to a drop in the country’s exports in the first half of this year. But now, with the yuan depreciating against the dollar and the baht, it will directly impact our exports to other countries as well in the rest of this year if the BOT does not do anything to manage the country’s currency,” he said.
He added that the depreciation of the yuan will make China’s products cheaper. This will lead to most importers asking Thai exporters for discounted price to compete with China’s products. This would affect new orders in the rest of this year, especially from customers in Europe.
“Normally, our production cost is already higher than that of China. When our currency also becomes stronger than the yuan, that will make our products less competitive than ones from China,” Sanan said.
Meanwhile, original equipment manufacturers or OEMs will also be impacted by the yuan’s depreciation as several industries in Thailand have got orders to make products under OEM, like China’s manufacturing, such as consumer products, home appliances, household products etc.
OEM orders may move from Thailand to China as the cost of production in China will be cheaper than in Thailand, if the government or the BOT do not do anything to manage the country’s currency, he said.
“At the meeting on August 8, we will provide information to the BOT and urge it to consider ways to support the country’s industry and exporters,” he said.
However, the depreciation of the yuan will benefit importers of products and machinery from China as they can buy at a lower price, he added.