Thailand's currency is too strong and affecting exports

The Bank of Thailand (BOT) should also cut interest rates to boost liquidity, Pichai Naripthaphan said, highlighting months-long disagreements between the government and the central bank over setting interest rates.

Last month, the ministry maintained its full-year export growth target at 1% to 2%. Exports rose 3.8% in the January-July period from a year earlier.

A bank employee collects Thai baht notes at a Kasikorn Bank in Bangkok, Thailand, January 26, 2023. Photo: Reuters.

In August, the central bank kept its key interest rate unchanged at 2.50% for the fifth consecutive meeting, saying policy settings were neutral as it resisted calls from the government for a rate cut.

The next rate review will take place on October 16.

Prime Minister Paetongtarn Shinawatra said earlier this year, before she became prime minister, that central bank independence was an obstacle to solving economic problems.

The government has repeatedly called for an interest rate cut to match a planned fiscal stimulus package seeking to jumpstart Southeast Asia's second-largest economy.

It will also launch the first phase of its signature “digital wallet” program later this month when it distributes 145 billion baht ($4.4 billion) to vulnerable groups of the population.

The entire 450 billion baht stimulus measure aims to give 10,000 baht to each of 50 million Thais to spend in their local communities.

The program has been criticized by economists, including two former central bank governors, as fiscally irresponsible. The government denies that, but has struggled to find funding.

The bank insists the policy is necessary to boost the economy, which the central bank expects to grow just 2.6 percent this year, up from 1.9 percent in 2023 and far behind most countries in the region.

However, central bank Governor Sethaput Suthiwartnarueput said growth remained below potential due to structural issues.

An Nhien (According to CNA)

Source: https://www.congluan.vn/noi-te-cua-thai-lan-dang-qua-manh-va-anh-huong-den-xuat-khau-post312640.html