Economists dismayed by baht row

Conflict deemed to be unhelpful for solutions

Published: 2 Mar 2013 at 00.00
Newspaper section: Business

Local economists have voiced disappointment over the most recent public debate on baht appreciation and the use of monetary policy to address it.

The jibes by the Finance Ministry and the Bank of Thailand over the matter, culminating in the ministry filing a letter to the central bank's board demanding it take responsibility for operating losses arising from a static interest rate, have not been helpful for creating better management of foreign capital inflows, the economists told a forum held by the Thailand Development Research Institute (TDRI).

The discussion flared up after the baht surged ahead of regional peers in the first few weeks of January after heavy inflows, particularly in the bond market.

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jaidee
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Discussion 2 : 03 Mar 2013 at 14.332
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Its noteworthy that the baht has risen against foreign currencies, but its also noteworthy that the baht is not used for exchange in real terms for goods and services, its the $Dollar that the Thai bank exchanges.

By falsely appreciating (overvaluing) the baht they can and do purchase dollars at reduced rates. Seems like every time it comes around to the end of the month the baht suddenly becomes stronger. this is the normal time for companies to pay debts and also time for retirement funds to begin transfers into Thai banks from foreign governments and businesses.

Once again "Artificial," strength of the baht will surely end badly.
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davidh
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Discussion 1 : 02 Mar 2013 at 16.391
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Surely these issues are a threat to the monetry working of ASEAN which needs a strong regional currency.

ASEAN is not going to get far until it adopts a single currency. They could call it the AseO!
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Economists dismayed by baht row | Bangkok Post: business