Businesses have repeated their call for the state to introduce strong remedies such as capital controls and a one-percentage-point cut in the policy rate, fearing the strong baht may lead Thai exports to contract in the third and fourth quarters.
Vallop Vitanakorn, a vice-chairman of the Federation of Thai Industries (FTI), said exporters have been hit hard by the strong baht in April - normally a period when foreigners place orders for textiles, consumer goods and other key products.
The FTI and the Thai Chamber of Commerce yesterday met with Commerce Ministry officials to discuss the baht's impact and suggest immediate measures to help Thai exports.
"The baht appreciation has made it harder for exporters to quote selling prices," said Mr Vallop.
"Meanwhile, if they deny accepting new orders, this will affect their employees and their market as the buyers shift to sellers in other countries. It will be much more difficult to win them back later."
Strong measures sought by exporters include a one-percentage-point cut in the overnight rate and a ban on foreign inflows seeking short-term exchange gains for at least three months, extended to six months if necessary.
"The most worrisome is the impact on the supply chain of export-oriented industries, as several manufacturers have now shifted to raw materials from foreign sources, giving local suppliers trouble," said Mr Vallop.
FTI chairman Payungsak Chartsutthipol said the private sector also asked the government to stimulate border trade to offset falling exports to Europe and the US
The private sector will offer a set of proposals to the Bank of Thailand governor next Tuesday, he said.
The proposals include slashing the policy rate, controlling capital inflows, switching from inflation targeting to exchange rate targeting and amending bond policy to make the market less attractive to foreigners.
Pornsil Patcharintanakul, a vice-chairman of the Thai Chamber of Commerce, said harsh remedies are urgently needed to stem massive capital inflows.
In a related development, the Office of the Agricultural Economics Foresight Center said the baht's appreciation is estimated to have caused 7.69 billion baht in lost revenue from farm exports in the first quarter.
Director Charuek Singhapreecha said the strong currency has hit shipments of rice, rubber, tapioca starch and fish.
"If the baht continues to edge up, the impact will affect chicken, fruit and other tapioca products such as chips and pellets," he said.