ID :
150359
Fri, 11/19/2010 - 10:26
Auther :
Shortlink :
http://m.oananews.org//node/150359
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Baht weakening only for the short run, says BoT chief
BANGKOK, Nov 19 – Bank of Thailand (BoT) Governor Prasarn Trairatvorakul on Thursday indicated the weakening of the baht to 30 to the US dollar stemmed from the current capital outflow, but emphasised that the situation would proceed only for the short term.
He said the outflow took place following the selloff for profit-taking in the stock market and the currency exchange market by foreign investors, who turned again to holding the dollar upon renewed concerns on public debt problems in such European countries as Ireland, Greece, and Portugal.
However, he believed the outflow would continue in the short run and that the Thai baht would again turn to strengthen because the United States still counts on easing financial measure by injecting a large amount of money into its economic system again.
BoT Governor Prasarn conceded the central bank is studying various measures to contain foreign capital inflows. Whether the measures will be taken or not depends on the influx of capital, the overall financial environment, side effects, and effectiveness
But for now he foresees no need to implement further measures to control the capital inflow.
Next year, he projects that foreign capital inflows would mount. So, it is necessary for the central bank to implement the policy with caution and prepare financial tools to cope with the situation.
Mr Prasarn affirmed that Thailand’s international reserves are now sufficient if the central bank wants to count on the reserves to maintain the country's financial stability in case of the capital outflow.
Also, the bank had to monitor the implementation of the loan control policy by China to curb the accelerating inflation rate because China is a major country engaged in trade with many countries worldwide including Thailand, he said.
The BoT chief admitted that the political situation is considered the gravest internal risk to the Thai economy next year because the economy could not enjoy substantial growth if the political climate is instable. (MCOT online news)
He said the outflow took place following the selloff for profit-taking in the stock market and the currency exchange market by foreign investors, who turned again to holding the dollar upon renewed concerns on public debt problems in such European countries as Ireland, Greece, and Portugal.
However, he believed the outflow would continue in the short run and that the Thai baht would again turn to strengthen because the United States still counts on easing financial measure by injecting a large amount of money into its economic system again.
BoT Governor Prasarn conceded the central bank is studying various measures to contain foreign capital inflows. Whether the measures will be taken or not depends on the influx of capital, the overall financial environment, side effects, and effectiveness
But for now he foresees no need to implement further measures to control the capital inflow.
Next year, he projects that foreign capital inflows would mount. So, it is necessary for the central bank to implement the policy with caution and prepare financial tools to cope with the situation.
Mr Prasarn affirmed that Thailand’s international reserves are now sufficient if the central bank wants to count on the reserves to maintain the country's financial stability in case of the capital outflow.
Also, the bank had to monitor the implementation of the loan control policy by China to curb the accelerating inflation rate because China is a major country engaged in trade with many countries worldwide including Thailand, he said.
The BoT chief admitted that the political situation is considered the gravest internal risk to the Thai economy next year because the economy could not enjoy substantial growth if the political climate is instable. (MCOT online news)
