ID :
141523
Fri, 09/10/2010 - 09:53
Auther :
Shortlink :
http://m.oananews.org//node/141523
The shortlink copeid
Baht likely to stay below 30 in Q4: UTCC
BANGKOK, Sept 10 - The baht is likely to strengthen and stay below 30 to the US dollar in the fourth quarter of this year, which will result in Thailand losing up to Bt100 billion in revenue from exports and tourism, according to a leading economic forecaster.
Thanawat Palavichai, director of the University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Center, said Thailand could lose economic benefits amounting to Bt50 billion from the export sector and Bt20 billion from overseas travel by Thai people if the baht continued appreciating in the fourth quarter.
The currency change will impact Thailand's gross domestic product (GDP) growth by 1 per cent, meaning that the Thai economy might grow only 6.5 per cent this year and only 4 per cent in 2011.
Given the continued appreciation of the baht, he said the Bank of Thailand should clearly signal that it will oversee the baht to ensure it stays at a level appropriate to the country's economic
conditions.
The government should come up with tax measures and other schemes to cope with the stronger baht, but the measures must not negatively impact investment sentiment in the Stock Exchange Thailand, he said.
One of the measures is to collect taxes on capital flowing into Thailand and staying in the country no more than three to six months, which is adopted by many countries to curb speculation on currencies.
Dr Thanawat said the central bank had already clearly signaled that it would raise the policy interest rate two more times within this year.
The interest hike would fuel returns in the secondary market, causing foreign capital to flow into the stock market and the secondary market in amount of around Bt50 billion.
Should the interest rate rise further, he said, the interest margin would be broadened, under which circumstances, the baht would probably appreciate further.
"The baht strengthening by 1 to the dollar will reduce Thailand's export growth by Bt200-300 billion or 3 per cent. Previously, Prime Minister Abhisit Vejjajiva asserted the government would closely supervise and monitor the baht movement to ensure it moves properly to the economic conditions," he said. (MCOT online news)
Thanawat Palavichai, director of the University of Thai Chamber of Commerce (UTCC) Economic and Business Forecasting Center, said Thailand could lose economic benefits amounting to Bt50 billion from the export sector and Bt20 billion from overseas travel by Thai people if the baht continued appreciating in the fourth quarter.
The currency change will impact Thailand's gross domestic product (GDP) growth by 1 per cent, meaning that the Thai economy might grow only 6.5 per cent this year and only 4 per cent in 2011.
Given the continued appreciation of the baht, he said the Bank of Thailand should clearly signal that it will oversee the baht to ensure it stays at a level appropriate to the country's economic
conditions.
The government should come up with tax measures and other schemes to cope with the stronger baht, but the measures must not negatively impact investment sentiment in the Stock Exchange Thailand, he said.
One of the measures is to collect taxes on capital flowing into Thailand and staying in the country no more than three to six months, which is adopted by many countries to curb speculation on currencies.
Dr Thanawat said the central bank had already clearly signaled that it would raise the policy interest rate two more times within this year.
The interest hike would fuel returns in the secondary market, causing foreign capital to flow into the stock market and the secondary market in amount of around Bt50 billion.
Should the interest rate rise further, he said, the interest margin would be broadened, under which circumstances, the baht would probably appreciate further.
"The baht strengthening by 1 to the dollar will reduce Thailand's export growth by Bt200-300 billion or 3 per cent. Previously, Prime Minister Abhisit Vejjajiva asserted the government would closely supervise and monitor the baht movement to ensure it moves properly to the economic conditions," he said. (MCOT online news)
