The private sector has asked the government and the Bank of Thailand to hold a meeting on finding ways to curb the baht’s rapid gains, which is putting the baht among the top-performing currencies in Asia.
The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) will propose next week that policymakers meet, said committee chairman Kalin Sarasin.
The baht is too strong and taking a toll on Thailand’s exporters and tourism industry, he said, adding that the business sector hopes the government will quickly resolve the problem.
“The baht has gained almost 12% [since the beginning of 2017] versus the greenback, prompting wariness in the business sector,” said Mr Kalin. “[That’s high] compared with the currencies of neighbouring countries, like Malaysia’s ringgit, which grew 9%, the Philippine peso [7%] and Vietnam’s dong [1%].”
The baht earlier this week hit a 40-month high against the US dollar at 32.10, year-to-date rising 1.2%, the biggest gain among its Asian peers. In 2017, the baht was the second-best performer after South Korea’s won.
The Bank of Thailand on Friday said it is ready to act if the baht strengthens enough to damage the private sector.
The central bank is monitoring the foreign currency market and will act to stem the baht’s rise if the currency gains too rapidly for local businesses to adjust, said deputy governor Mathee Supapongse.
Mr Kalin said the JSCCIB wants the central bank to implement more measures to help small and medium-sized enterprises (SMEs), in addition to hedging.
The Bank of Thailand and other banks have jointly offered foreign exchange hedging tools with lower fees to SMEs to help them tread the volatile foreign currency market.
The business sector has agreed with the central bank’s decision to monitor offshore and onshore flows, believing it will act when necessary.
In the meantime, the JSCCIB forecast the economy will expand within 3.8-4.5% this year, assuming that exports grow 3.5-6%.
He said the business sector is worried about a spate of risks that could weigh on economic growth, including US trade policy, geopolitical tensions on the Korean peninsula and the baht’s run-up.
The JSCCIB also urged the government to speed up investment spending on mega-infrastructure projects because public investment is slowing down, hitting private sector confidence.