Thailand’s economic growth outlook of 2.8 percent next year is “disappointing” and policymakers are doing what they can to curb excessive gains in the currency, Bank of Thailand (BoT) Governor Veerathai Santiprabhob said yesterday.
A “satisfying” level of growth should be about 3.5 to 4 percent a year, Veerathai said in a speech in Bangkok.
The bank is “actively managing the exchange rate” and monitoring short-term foreign inflows closely to avoid speculation in the baht, he said.
The Bank of Thailand last week lowered its growth forecasts for this year and next year, given the weaker global backdrop, trade disruptions and a stronger currency.
Veerathai said a big risk to the economy is lower employment, adding that a number of manufacturers are relying on temporary workers and some are reducing work hours.
EXCHANGE RATE
The “central bank is actively managing the exchange rate. Without our actions, the baht would be much stronger than the current level,” Veerathai said.
The baht has gained almost 8 percent against the US dollar this year, the best performer in Asia.
“Still, we are careful of any excessive interference because there would be some side effects,” he said.
“It would also expose Thailand to more accusations as a currency manipulating country,” he said.
“The country’s foreign currency reserves have jumped significantly because BoT buys a lot of [US] dollars to slow the baht’s strength,” he said.
“We are closely watching the inflows of short-term foreign funds,” Veerathai said.
“We don’t want to see the excessive speculation on the baht exchange rate,” he said.
MAZDA
Separately, Mazda Motor Corp is shifting some production of vehicles destined for the Australian market from Thailand to Japan, citing the adverse impact of a stronger baht, the Nikkei reported.
Assembly of CX-3 sports utility vehicles is to be moved to its Yamaguchi factory in southwest Japan this year, the report said, without citing anyone.
Mazda has the capacity to make about 135,000 vehicles in Thailand annually.
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