Bank of Thailand (BoT) Governor Prasarn Trairatvorakul on
Wednesday conceded the baht would remain volatile next year as a result of
continued capital inflows. Speaking during a meeting with representatives of
the Thai Chamber of Commerce on the “Adjustment of Thai Economy under the
Monetary Policy Framework,” he said that US$30 billion of foreign capital
had so far flowed into Thailand.
Of this, $12 billion is revenue earned from Thailand’s
exports of products and services, $1.5 billion is capital flowing into the
stock market, $4.5 billion into the bond market and the remainder are
foreign direct investments. A large amount of capital flowed into Thailand
in third quarter of this year, but there was a capital outflow in November.
He said the central bank continued to intervene in the
baht’s movement to ease the currency fluctuation, but it would not peg the
baht at a particular level because it runs a risk of being attacked.
What should be closely monitored is the unstable recovery
of the global economy, the uncertainty of policies and measures adopted by
other countries, especially the currency policy of China, and Thailand’s
domestic stability. However, the central bank will attempt to supervise the
baht to ensure it moves in the same direction with other currencies in the
Under the current circumstances, exporters should
increase their competitiveness in production, product quality development,
and location of new markets to ensure they compete with other countries