Strong baht could hurt export targets

Published: 12/10/2009 at 08:44 PM
Online news: Breakingnews

Thailand's exports are unlikely to achieve 10% growth next year if the government leaves the baht's appreciation unchecked, exporters warn.

"Ongoing baht strength will harm Thai shipments and weaken our competitiveness,'' said Pornsil Patchrintanakul, deputy secretary-general of the Board of Trade.

Mr Pornsil was one of a group of leading executives from more than 50 trade associations who on Monday met with Veerasak Jinarat, the vice-minister for Commerce.

The baht, quoted Monday at 33.35 to the US dollar, is currently trading at a 14-month high and is up 4.4% since January.

Exporters said the baht has appreciated significantly faster against the dollar than competing currencies such as the Chinese yuan or the Vietnamese dong, hurting Thailand's trade competitiveness.

Exporters called on the central bank to help maintain the baht at about 36 baht per dollar to keep Thai exports competitive particularly for agriculture and food.

But Bank of Thailand Governor Tarisa Watanagase said the baht was moving in line with other Asian currencies. There was no need for a repeat of the 2006 capital controls to try to prevent a rise in the currency's strength.

"We are still taking care of the baht,'' she said. "But there is no need to have any capital controls as we have not seen speculation in the currency yet.''

The central bank does plan to diversify its foreign reserves with other currencies in coming weeks, she said.

"We will do what we can,'' she said.

The BoT has intervened steadily to slow the baht's rise to help Thailand's export-driven economy, but the currency's value against the dollar has still increased by about 2% since September.

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Unamerican

Discussion 4 : 13/10/2009 at 07:30 AM4
want my money

Good response but i would like to ask a question.

In 50 years from now do you believe their will be enough food in Thailand to feed the growing Thai population?

You mentioned world wars and you are correct. I dont think we can say there will not be another world war. It took 15 years for the 1920's depression before war did come. We are only 2 years into this economic correction.

The position of power for many countries is about to change. I know in my own working career that when you get a new boss the office takes months to settle down. Sometimes people leave or fight for promotion. The world is about to get a new boss to and you can already see other countries starting to fight for promotion within the world. (BRIC)

Thailand has tried to copy America and for the last 40 years has seen the country become one of the most advanced in South East Asia. Singapore also followed but now produces many world patents in medicine and Electronics. Malaysia is attempting to build its own airlines and car companies(Probably a lot more but I would need to research it further). I can only see Thailand attempting to produce more agriculture from a land that has been misused and needs time to recover. Making things for other countries that no longer want them.

The copying in Thailand has been a short term win fall for Thailand but it will now be a major concern for Thailand. To develop into a developed country Thailand now needs to start giving something back to the world. Design and insight is key.

Democracy will not help Thailand. If taksin was in power he would do the same as abhisit and follow the rest of the world into record public debt. These issues are not important for Thailand just an extension of the lets take everything for oneself attitude in the country instead of helping the country and the world.

I am beginning to think it should be Thai people that should be taking a Thai culture course so they can live in this country instead of the working expats like myself.

I already know more of the Thai alphabet then most Thais I know and when I have a question I dont ask older Thais. I ask my pratom 6 students. These kids are taught by good Thai teacher that are constantly being told they are bad teachers by bosses and parents. These teacher will set the future of the country and are already doing so. Now we just need to give them the confidence to express and be creative with the students learning so design and understanding will become part of Thai future.
wantmymoney

Discussion 3 : 13/10/2009 at 12:28 AM3
I am not an economist and I am sure other economist understand the current situation either. This is the first world wide recession since 1930s and many of us were not even borned yet. None of us live through those difficult years which resulted in 2 world wars. Of course we will not world wars this time but almost every country that depended on export consumption by the americans and europeans will face long term unemployment, more poverty and riots. Thailand is not exception, US is their biggest customer even till today. More than half the population is poor or earning below US$2 a day, its difficult to have domestic consumption large enough to absorb the lag in export. Thailand still need the US market more than other asean countries, it cant sell its shrimp to asian countries because its baht has risen.Basically thailand need to reorganise its agriculture base, to be more efficient and provide top quality, there is no other high capital industries that it can depend for growth. Central bank can leave exchange unchanged for now but next year it will have to decide what to do with imported inflation.
observer

Discussion 2 : 12/10/2009 at 10:57 PM2
Tarisa Watanagase is the true lackey of Abhisit and all the other "dollar collectors" who support his government. It´s a shame. Wake up Thai people!
Unamerican

Discussion 1 : 12/10/2009 at 10:52 PM1
I think the people wishing to lower the baht against the american dollar have missed the point.

The world has changed. The USA will no longer take all the exports Thailand can throw at it because it will take at least 10 years for the USA to pay it private and public sector bills.

Abhisit has got this one right. Sweet talking the BRIC countries will help Thailand in the long term but Thailand can no longer have the manufacturing base it has. It needs to diversify into other areas.

This is my concern. The farmers have poured so much chemical on Thai soil that it will take many years for Thai soil to recover. The manufacturing industries are no longer needed as the developed countries need to pay off debt. Not buy new cars. The tourist industry in Thailand has been brought to a disturbing level of irrelevance within most Thais eyes and tourists are to difficult to deal with so get rid of them.

They is one thing going for the country. Ma Ma is cheap and plentiful. Many University students have survived on it in many countries for many years. I think I will invest in Ma Ma but unfortunately I cannot. I wonder if i was allowed to how fast Ma Ma noodles could expand its market share all over the world in a time when it is needed most.

Thailand may want to move from a developing to a developed country but they need to understand the consequences. This means no longer can they leach of other countries technologies but they must start producing they own designs for the modern world. At least Malaysia is having a go with Proton. Thailand isn't.

All power to the research revolution that is being toted in the Thai education system. Lets hope Thailand can recover in the next few years and start producing a quality product designed and built in the country by Thais.

Strong baht could hurt export targets