ID :
146160
Sat, 10/16/2010 - 11:51
Auther :
Shortlink :
http://m.oananews.org//node/146160
The shortlink copeid
Targeting specific exchange rate is very difficult, says BoT chairman
BANGKOK, Oct 16 -- Bank of Thailand (BoT) board of governors chairman Chatu Mongkol Sonakul on Friday conceded it is difficult to target a specific exchange rate because currency exchange trading in the global market is at a very high level.
Speaking of the proposed currency exchange targeting, he said Thailand had attempted to adopt a fixed exchange rate regime on several occasions, but to no avail.
“Targeting a specific exchange rate will have an impact on the economy because we have to adjust the economic conditions to the fixed baht value. Also, currency exchange trading in the world market is as high as US$4 trillion at present. So, it is an uphill task to fix the currency exchange rate,” he said.
Regarding former deputy prime minister and finance minister Veerapong Ramangkura’s proposal that the policy interest rate be cut by 75 basis points, he said Dr Veerapong is one of Thailand's veteran economists and his comments should be taken into account.
The central bank, as a agency responsible for implementing the policy, is ready to accept any comments and consider whether they are justified or not.
He allowed measures issued by the central bank earlier are less effective in stemming the baht surge, but it is considered a good sign to see state agencies issue measures to help people affected by the baht appreciation.
MR Chatu Mongkol said he personally supported the Monetary Policy Committee keeping the policy interest rate intact at its meeting Wednesday and raise the rate at the next meeting.
He said the need to raise the policy rate to curb the baht surge had lessened for the time being because inflation had not accelerated.
However, the proposed reduction of the policy rate by 0.75 per cent should be ruled out because it could undermine the central bank’s trustworthiness in monetary policy implementation, he said. (MCOT online news)
Speaking of the proposed currency exchange targeting, he said Thailand had attempted to adopt a fixed exchange rate regime on several occasions, but to no avail.
“Targeting a specific exchange rate will have an impact on the economy because we have to adjust the economic conditions to the fixed baht value. Also, currency exchange trading in the world market is as high as US$4 trillion at present. So, it is an uphill task to fix the currency exchange rate,” he said.
Regarding former deputy prime minister and finance minister Veerapong Ramangkura’s proposal that the policy interest rate be cut by 75 basis points, he said Dr Veerapong is one of Thailand's veteran economists and his comments should be taken into account.
The central bank, as a agency responsible for implementing the policy, is ready to accept any comments and consider whether they are justified or not.
He allowed measures issued by the central bank earlier are less effective in stemming the baht surge, but it is considered a good sign to see state agencies issue measures to help people affected by the baht appreciation.
MR Chatu Mongkol said he personally supported the Monetary Policy Committee keeping the policy interest rate intact at its meeting Wednesday and raise the rate at the next meeting.
He said the need to raise the policy rate to curb the baht surge had lessened for the time being because inflation had not accelerated.
However, the proposed reduction of the policy rate by 0.75 per cent should be ruled out because it could undermine the central bank’s trustworthiness in monetary policy implementation, he said. (MCOT online news)
