Thailand central bank rules out baht devaluation<\/p>\n
BANGKOK (Reuter): The Bank of Thailand (BOT) yesterday ruled
\nout a devaluation of the baht as a policy option to tackle the
\ncountry's current economic problems.<\/p>\n
\"The Bank of Thailand wishes to reiterate its firm stance that
\ndevaluation of the baht is definitely not a policy option to
\ntackle Thailand's current economic problems,\" the central bank
\nsaid in a statement.<\/p>\n
It added that the baht was not fundamentally overvalued and a
\ndevaluation would do more harm than good to overall economy.<\/p>\n
\"The BOT therefore remains firmly committed to maintaining the
\nintegrity of Thailand's current exchange rate regime which has
\nbeen and will continue to be an appropriate system for Thailand,\"
\nthe central bank said.<\/p>\n
The baht was firmer early yesterday as players in the market
\nwere reluctant to buy the dollar at current levels amid ideas the
\ngreenback may have been overbought, dealers said.<\/p>\n
At 0308, the baht was bid\/offered at 26.010-26.030 against the
\ndollar against 26.050-26.060 late on Monday.<\/p>\n
Some foreign analysts have bet on a baht devaluation recently,
\nsaying that the country's wide current account deficit, slowing
\neconomy and sluggish exports growth could be remedied somewhat by
\nsuch a move.<\/p>\n
But the central bank and the government have been resolutely
\nagainst any devaluation for some time and rejected such calls.
\nSome officials said it would be politically difficult for the
\ngovernment to devalue the currency.<\/p>\n
The central bank is also estimated by some analysts to have
\nspent anywhere between US$3-$10 billion since late last year to
\ndefend the baht which came under pressure from attacks by
\noffshore speculators since last November.<\/p>\n
The firming U.S. dollar pushed the baht-dollar mid-rate fixed
\ndaily by the central bank down to over five-year lows recently.<\/p>\n
The baht is at present pegged to a basket of currencies
\nbelieved to be dominated by the U.S. dollar. The current exchange
\nrate regime, which has been in place since November 1984, has
\nmade the baht one of the most stable currencies in the region but
\nalso an easy target for speculators.<\/p>\n
\"The stability of the baht has helped promote Thailand's rapid
\nadvancement in trade and investment for over a decade,\" the
\ncentral bank statement said.<\/p>\n
\"The recent sharp appreciation of the U.S. dollar has led to
\nsome weakening of the baht against the U.S. dollar, but in real
\neffective terms, the baht remains fairly valued,\" it said.<\/p>\n
The central bank stressed that the country's wide current
\naccount deficit resulted from high rate of investment and not a a
\nproblem of currency misalignment.<\/p>\n
It said the government's tight fiscal policy which recently
\nled to massive 99 billion baht ($3.8 billion) in spending cuts
\nwould address the problem.<\/p>\n
The government forecast that after the spending cuts, the
\ncurrent account deficit would narrow to 7.4 percent of the GDP
\nfrom 7.9 percent projected earlier.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/thailand-central-bank-rules-out-baht-devaluation-1447893297",
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