Thai Prime Minister Suggests a Way to Weaken the Baht
“We have to think about how we will spend in dollars in many ways to help weaken the baht.”
Prayut Chan-o-cha, Thai prime minister, recommends a method for diluting the country’s strong currency: spending in US dollars. In an appearance in Bangkok, the PM stressed out the importance of the private sector in making this possible.
A Bangkok Post article quoted him saying: “A current-accounts surplus, capital inflows and high foreign reserves are among the causes of baht strength.”
The aforementioned statement echoed earlier demands for the government to increase imports. Economists believe that by converting baht into dollars, the currency would not damage the local economy.
Siam Commercial Bank’s market research head, Kampon Adireksombat, was convinced that the prime minister supports this approach. He expressed his support by telling people to convert their baht reserves into dollars.
Mr Kampon said: “He [the PM] wants people to import more and invest more. If we spend more, we help reduce our trade surplus.”
In 2019, the baht increased 8.8 per cent against the dollar, becoming a top-performing currency among international emerging markets. The Bank of Thailand adjusted the rules governing capital outflows a month ago. This was an attempt to slow down the baht’s continuous appreciation, which is negatively affecting tourism and exports.
According to a forecast by the National Economic & Social Development Council of Thailand, the final GDP growth for 2019 will be at 2.6 per cent. Should this happen, this would be the lowest growth in five years.