ID :
143102
Wed, 09/22/2010 - 09:22
Auther :
Shortlink :
http://m.oananews.org//node/143102
The shortlink copeid
Central bank urged not to control capital influx into secondary market only
BANGKOK, Sept 22 – The Bank of Thailand (BoT) should not opt to curb the foreign capital inflow only into the secondary market because the baht rise stemmed from the capital flowing into various channels, according to a leading economist.
Phatra Securities Managing Director Supavud Saicheua said the central bank should consider carefully whether it must act to control short-term foreign capital inflow. The bank’s move to control some markets separately is seen as being unjustifiable.
Actually, Mr Supavud said he did not want to see the central bank impose measures to control the capital inflow. What it should do instead is to make the capital flow into the country more slowly.
The baht is quite likely to continued strengthening because the capital from the United States and Europe still overwhelmed Asian countries including Thailand for a return from the interest spread.
At present, the Thai government bonds offer an interest rate of up to 2.4 per cent while the interest rate of US bonds is only 0.5 per cent. The interest spread of around 2 per cent is one of the key factors behind the foreign capital inflow.
Mr Supavud suggested importers should cash in on the stronger baht to purchase capital goods, machinery and raw materials for local production because they could buy them at lower prices.
It would help save on production costs and ease inflationary pressure in 2011, he said. (MCOT online news)
Phatra Securities Managing Director Supavud Saicheua said the central bank should consider carefully whether it must act to control short-term foreign capital inflow. The bank’s move to control some markets separately is seen as being unjustifiable.
Actually, Mr Supavud said he did not want to see the central bank impose measures to control the capital inflow. What it should do instead is to make the capital flow into the country more slowly.
The baht is quite likely to continued strengthening because the capital from the United States and Europe still overwhelmed Asian countries including Thailand for a return from the interest spread.
At present, the Thai government bonds offer an interest rate of up to 2.4 per cent while the interest rate of US bonds is only 0.5 per cent. The interest spread of around 2 per cent is one of the key factors behind the foreign capital inflow.
Mr Supavud suggested importers should cash in on the stronger baht to purchase capital goods, machinery and raw materials for local production because they could buy them at lower prices.
It would help save on production costs and ease inflationary pressure in 2011, he said. (MCOT online news)
