ID :
143109
Wed, 09/22/2010 - 09:37
Auther :
Shortlink :
http://m.oananews.org//node/143109
The shortlink copeid
TDRI warns BoT of wide-ranging impact of capital inflow controls
BANGKOK, Sept 22 – The Bank of Thailand (BoT) should not take any measures to control the foreign capital inflow because it could have wide-ranging repercussions as seen in late 2006 when the central bank imposed the 30 per cent reserve requirement, according to Thailand Development Research Institute (TDRI).
Somchai Jitsuchon, TDRI’s research director for macroeconomic development, said the central bank should closely watch the capital inflow into the secondary market.
Unless it was found that the capital had flowed into the market for obvious speculation, he saw no need for the central bank to impose any measure to control the capital inflow for the time being.
No matter whether the Monetary Policy Committee would raise the policy interest rate further, he believed that foreign capital would continue flowing into Thailand an in other countries in Asia.
Mr Somchai said he was confident that the five measures the central bank planned to take to rein in the baht surge would help ease a pressure for the baht to strengthen too rapidly because the measures are aimed at facilitating the money transfer for investment overseas.
Simultaneously, he suggested, what the government should do urgently is to take advantage of the baht rise by encouraging investment because the cost of importing machinery for future investment expansion is low.
More investment should be made in preparation for the opening of the ASEAN Economic Community in 2015 and in order to reduce the dependence on exports for a key drive to the economic growth in the past many years. (MCOT online news)
Somchai Jitsuchon, TDRI’s research director for macroeconomic development, said the central bank should closely watch the capital inflow into the secondary market.
Unless it was found that the capital had flowed into the market for obvious speculation, he saw no need for the central bank to impose any measure to control the capital inflow for the time being.
No matter whether the Monetary Policy Committee would raise the policy interest rate further, he believed that foreign capital would continue flowing into Thailand an in other countries in Asia.
Mr Somchai said he was confident that the five measures the central bank planned to take to rein in the baht surge would help ease a pressure for the baht to strengthen too rapidly because the measures are aimed at facilitating the money transfer for investment overseas.
Simultaneously, he suggested, what the government should do urgently is to take advantage of the baht rise by encouraging investment because the cost of importing machinery for future investment expansion is low.
More investment should be made in preparation for the opening of the ASEAN Economic Community in 2015 and in order to reduce the dependence on exports for a key drive to the economic growth in the past many years. (MCOT online news)
