Demanding BOT act on baht is futile
Re: "Baht takes big chunk off exporters' profit - FTI chairman lashes BOT for doing nothing to rein currency", Business, May 4.
It is rather wearisome to see the publicity blitz of Payungsak Chartsutipol of the Federation of Thai Industries calling (almost demanding) the Bank of Thailand (BOT) and other powerful bodies to aggressively stem the baht’s rise. He sounded as though the authorities especially the BOT are almighty to keep the baht at 30.
He had better remember that the volatility of a currency is not controllable and manageable by the BOT or Finance Ministry but by the world market, which is 100 times bigger than one nation like Thailand.
His bombastic words are rather like deja vu for officials because, in 1996 and 1997, the BOT was also being pressed by the private sector and believed themselves as big enough to beat the world’s speculators. The BOT confronted the market and literally bankrupted Thailand. After that event, like the Bank of England, which had defended the sterling unsuccessfully, all central bankers became humble and knew their limitations.
The currency movement has become a poker game and not a boxing match anymore.
Recognising the BOT’s limitations is necessary and good for all exporters instead of holding high hopes by lashing Prasarn as a pastime.
The baht will not weaken until the market – not the Thai government or the BOT – says so.
Songdej Praditsmanont
Bangkok
