Chuan sees more economic hurdles ahead<\/p>\n
BANGKOK (Reuters): Thai Prime Minister Chuan Leekpai said
\nyesterday his battered country still faced economic hurdles one
\nyear after the float of its currency, a move that sparked its
\nworst economic crisis in decades.<\/p>\n
Chuan told Reuters in an interview the currency was now at a
\nmore realistic level than it had been earlier this year. It hit a
\nhistoric low of 56.90 baht to the U.S. dollar in January.<\/p>\n
\"There are still many problems in the future,\" Chuan said,
\nadding that the government would have to use various \"mechanisms
\nand measures\" to improve the economy.<\/p>\n
\"It is a matter of not slowing the economy further,\" he said.
\n\"The government has to restore confidence to bring money in from
\nforeign countries so that we can reduce local interest rates.\"<\/p>\n
Cash-strapped Thailand is suffering from a severe liquidity
\ncrunch, high interest rates, sagging exports, capital shortages
\nin its ailing financial sector, loss of foreign investor
\nconfidence and growing unemployment.<\/p>\n
As if all this were not enough, Chuan's government must also
\ngrapple with the resultant social stresses.<\/p>\n
Speaking on the first anniversary of the devaluation of the
\nThai baht on July 2 last year, which in turn triggered Asia's
\nfinancial crisis, Chuan said the government had been successful
\nin stabilizing the baht.<\/p>\n
\"The current baht value is more realistic and more stable. The
\nmovement of the baht now is normal,\" he said. \"The market
\ninterest now is not on the rate of the baht but on the stability
\nof the baht.\"<\/p>\n
The baht, which has traded in a 37.50-45.00 per dollar range
\nin recent months, was quoted at 41.75-41.85 late in the Asian
\ntrading day yesterday.<\/p>\n
The currency has lost about 40 percent of its value since its
\nflotation.<\/p>\n
Chuan said there had been many problems since devaluation, and
\nhis government understood people's concerns.<\/p>\n
\"I understand that people want the situation to be the same as
\nbefore 1997. But it is impossible in the short- to medium-term,\"
\nhe said.<\/p>\n
Chuan's six-party coalition took power last December, and has
\nhad a rough ride since with the opposition, depressed farmers and
\nactivists claiming his administration is funding bail-outs of
\nrich, failed businessmen at the expense of the poor.<\/p>\n
But Thailand still retained some advantages, Chuan said.<\/p>\n
\"In terms of exports and doing business, Thailand is quite
\ncompetitive compared to Malaysia, the Philippines and South
\nKorea,\" he said.<\/p>\n
Chuan indicated the government wanted lower interest rates,
\nsaying it wanted to convey this to the markets.<\/p>\n
Thai rates are among the highest in the region, with the
\nminimum lending rate at between 15.25-15.50 percent.<\/p>\n
But he suggested that the priority was improving liquidity,
\nwhich would in turn bring down rates.<\/p>\n
\"Comparing the problem of high interest rates with the
\nliquidity problem at the moment, businessmen prefer to have more
\nliquidity in the system,\" he said.<\/p>\n
Businessmen and exporters have complained bitterly that high
\nrates and selective lending by commercial banks have choked their
\noperations.<\/p>\n
Thailand has received millions of dollars in loans from the
\nAsian Development Bank and the Japan Export Import Bank to
\nfinance exporters, but local industry representatives say the
\nmoney has failed to find its way to those really in need.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/chuan-sees-more-economic-hurdles-ahead-1447893297",
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