Baht’s rise due to continuous current account surplus: BOT

The BOT vowed to take more action if needed and urged other agencies to jointly tackle the appreciation of the currency.
The BOT is closely monitoring the baht’s value, Mathee Supapongse, deputy governor of monetary stability, revealed on Tuesday (January 14), adding it was due to structural problems.
He said the baht’s appreciation, especially in the second half of last year, was caused by Thailand’s current account surplus.
The current account surplus resulted from higher revenue coming from exports and tourism compared to outflows for imports.
Mathee added that the current account surplus was not a result of short-term speculation by foreign investors.

Previously, the BOT had slowed down the baht's appreciation by purchasing dollars and selling the baht. This operation increased Thailand’s foreign exchange reserves continually.
In the past five years, Thailand’s exchange reserves increased US$80 billion. “If the BOT did not manage the appreciation, it would have been more severe than at present,” Mathee added.
However, the BOT saw the baht appreciation as a structural problem from continuous current account surplus and the low rate of foreign securities investment.
“Appreciation management, as well as other short-term financial measures, were necessary for the current economic situation,” the deputy governor added.
He concluded that the issue of the baht’s appreciation needed collaboration from relevant agencies, pointing out that there were numerous ways to cope with the problem.
“We should increase our imports of infrastructure and machinery to improve Thailand’s production, at a time when the baht is appreciating,” he said. “Also, relevant agencies should reduce the baht’s purchasing strength in the export sector, by keeping Thai revenue in foreign currency deposits.”