Thai PM urged to prevent rise of baht

Thai Prime Minister Abhisit Vejjajiva should show "strong signals" that the government would not allow the Thai baht to rise any further against U.S. dollar, a leading industrialist said on Friday.

"The government has not shown any of such signals. If the baht rises any much further, our industries will fail to adjust," Payungsak Chartsutipol, Chairman of the Federation of Thai Industries (FTI), the leading association of multi-sector industries, told a press conference.

Payungsak said the Bank of Thailand (BoT), the country's central bank, should also intervene to prevent the Thai currency from rising faster than other currencies in Southeast Asia.

The baht climbed to a range of 30.63 to 30.73 baht against the U.S. dollar on Thursday, the highest level in 13 years, said a statement issued by the FTI after a meeting over the impact of the rising baht.

Since the beginning of this year, the baht has risen 2.52 baht, or 7.60 percent, against U.S. dollar, one of the highest appreciation rates among all currencies in the region, the statement said.

FTI said in the past month, the baht has soared 3.74 percent against U.S. dollar, and if the appreciation continues like this, the Thai currency could rise to 29.50 baht to one U.S. dollar by the end of October.

Payungsak said export oriented industries have been "severely" affected by the rising Thai currency such as garments, textile and agricultural products, adding that for every one-baht appreciation against the dollar, it would cost the auto industry six billion baht (195 mln U.S. dollars).

The chairman also said as inflows of short-term funds to speculate in Thai stocks and bonds markets have contributed to the baht's appreciation, the government should come up with measures to discourage such inflows.

"The government could require these funds to stay in the country for at least six months, as Indonesia and the Philippines have already enforced such measure," according to a statement read by Payungsak.

Meanwhile, the government could also allow exporters to pay shipment freights in foreign currencies without having to convert them into local currency in helping to lessen the exchange losses, he said.

Source: Xinhua