Print

Mail

wiki links

Thai prime minister endorses package of measures to rein in currency's rise

The Thai prime minister yesterday agreed on new measures aimed at curbing the baht's rise, while the central bank governor insisted the country would not return to a fixed exchange rate system.

"My government has a clear stance that we want to stabilize the currency," army-installed Prime Minister Surayud Chulanont said after meeting with top finance officials.

Surayud endorsed a package of measures laid out by his economic team, including Finance Minister Chalongphob Sussangkarn and Bank of Thailand Governor Tarisa Watanagase.

Industry Minister Kosit Panpiemras said that the Cabinet was expected to formally approve the measures on Tuesday in hopes of weakening the baht.

Under the new rules, Thai firms will be allowed to keep foreign currency revenues for a longer period while also being encouraged to use dollars to pay down their debts.

Thai citizens would also be allowed to open US dollar-bank accounts with deposits worth up to US$100,000, Kosit said.

"The currency situation is improving as the baht is softening," Chalongphob said.

The baht was quoted at 33.62 to 33.66 to the US dollar in afternoon trade yesterday, down from Thursday's close of 33.50 to 33.51.

Tarisa said the central bank was doing its utmost in an effort to halt the rising baht, which has remained at 10-year highs against the greenback, but stressed that Thailand would not go back to a pegged currency system.

"We cannot do things that are extreme such as [returning to] a currency peg system. We have to be moderate," the central bank chief told reporters.

Thailand maintained a fixed exchange rate until 1997, when the currency came under speculative attack and the central bank exhausted its foreign reserves trying to defend it.

The decision to finally float the baht sparked the Asian financial crisis, sinking economies around the region.
This story has been viewed 1090 times.