THURSDAY, March 28, 2024
nationthailand

FTI suspects speculation behind baht appreciation, urges close scrutiny by government

FTI suspects speculation behind baht appreciation, urges close scrutiny by government

The Federation of Thai Industries (FTI) has urged the government and relevant agencies to closely monitor the baht amid concerns of foreign money entering the country and being used for speculation and inflating the value of the baht.

FTI vice chairman Suchart Chantaranakaracha issued the warning on Wednesday during the release of the Industry Sentiment Index report for January.

He said the baht had depreciated to its lowest point in October 2022 when it fell to 38.80 to the US dollar before gradually appreciating in January to 32 to 33 baht to the dollar without any significant drivers of growth.

He said there had been no indications of a positive outlook for Thailand's economy over the previous four months.

He pointed out that tourism is yet to make a full recovery, as China has only recently opened its border. The US Federal Reserve is still raising interest rates while the country's inflation rate is still high and electricity prices are rising.

Suchart said the baht's steady appreciation against the dollar despite moderate growth forecasts for the country is a matter of concern, as it could indicate foreign capital is entering the country to speculate on the Thai currency.

He proposed holding the value of the baht at around 34 baht, a rate suitable for both importers and exporters, to ensure competitiveness.

Suchart Chantaranakaracha (left)

The appreciation of the baht is a major concern for Thai manufacturers in both the import and export sectors over the next three months, despite the fact that their confidence in Thailand's economy has reached its highest level in 43 months, at 93.9 points.

Geopolitical tensions, a slowdown in the United States and Europe, the possibility of an interest rate hike and volatile oil prices could all harm Thailand's industry sector, according to the survey.

However, the return of Chinese tourists after the country ended all Covid restrictions, would help Thailand’s tourism grow exponentially, also increasing domestic consumption demand.

The survey urged the government to adopt a positive attitude in order to strengthen Thailand's competitiveness by lowering costs, particularly electricity prices.

Meanwhile, the FTI said it supports the government’s bid to forge bilateral free trade agreements with potential markets, such as Europe and the Middle East.

 


 

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