Thai Chamber of Commerce Calls for Action to Stabilize Baht Currency
The Thai Chamber of Commerce is urging the central bank to take immediate action to stabilize the baht currency, which has been rapidly gaining strength in recent months. The appreciation of the baht is raising concerns among businesses, particularly in the export and tourism sectors, which are crucial drivers of the Thai economy.
Impact on Exports and Tourism
The baht’s rapid appreciation has already started impacting the competitiveness of Thai exports, especially in key sectors such as agriculture and food products. This poses a significant challenge for businesses that rely heavily on foreign markets for revenue. Additionally, the strengthening baht is also affecting the tourism industry, making it more expensive for foreign visitors to travel to Thailand.
The Bank of Thailand’s Role
The Thai Chamber of Commerce is calling on the Bank of Thailand to closely monitor the baht’s value and ensure that it aligns with both global and domestic economic conditions. The central bank plays a crucial role in maintaining currency stability and must take proactive measures to prevent excessive volatility in the foreign exchange market.
Current Baht Exchange Rate
As of Monday, the baht was trading at around 32.8 to the dollar, its strongest level in over 19 months. This represents a significant appreciation of 13% against the dollar since April, when it hit a low of 37.17. The chamber believes that an appropriate exchange rate would be around 34 baht to the dollar to support the competitiveness of Thai exports.
Meeting with Government Officials
The Thai Chamber of Commerce is seeking a meeting with the central bank and the finance ministry to discuss potential economic stimulus measures, interest rate reductions, and debt resolution strategies. These initiatives are crucial for supporting businesses and households that have been negatively impacted by the economic challenges brought about by the pandemic.
Household Debt Concerns
Thailand’s household debt currently stands at around 16 trillion baht, equivalent to 90.8% of the country’s gross domestic product. This high level of debt poses risks to the financial stability of households and could further exacerbate economic challenges if not properly managed. The chamber is urging the government to address this issue through targeted policies and interventions.
BoT Governor’s Response
The Governor of the Bank of Thailand, Sethaput Suthiwartnarueput, has acknowledged the concerns surrounding the baht’s strength and volatility. While he stated that the baht’s appreciation has not significantly impacted exports so far, he emphasized the need to prevent excessive fluctuations in the currency market. The central bank is closely monitoring the situation to ensure stability and mitigate any negative impacts on the economy.
Revised Growth Forecast
Despite the challenges posed by the strengthening baht, the Thai Chamber of Commerce has revised its growth forecast for 2024 upwards. The chamber now expects the economy to grow by 2.6% to 2.8%, citing the government’s stimulus measures as a key factor driving this positive outlook. These policies are projected to contribute an additional 0.2 to 0.3 percentage points to economic growth, providing much-needed support to businesses and households.
In conclusion, the Thai Chamber of Commerce’s call for action to stabilize the baht currency reflects the urgent need to address the challenges facing the Thai economy. By working closely with government officials and the central bank, businesses can navigate the current economic landscape and ensure sustainable growth in the long term.