Finance Minister Korn Chatikavanij on Monday advised operators in Thailand’s currency exchange rate-affected businesses to brace themselves for a further strengthening of the baht.
Commenting on the continued baht appreciation, he said, the currency had strengthened naturally in tandem with economic growth, boosted by a substantial export increase.
“Although the Bank of Thailand is able to manage the currency efficiently, it cannot eventually resist the market mechanism as the baht is in greater demand than the US dollar in the market,” he said.
Under the circumstances, operators in businesses affected by the currency exchange rate business must adjust themselves so that they are able to manage their business efficiently.
Currencies undervalued to export more easily
The country has been most successful in this way is China, which has now earned enough foreign exchange reserves : about $ 1.3 trillion, which are also often invested in government bonds ( mainly U.S. Treasuries). To remain competitive vis-à-vis China, most Asian countries have therefore agreed to some undervaluation of their currencies to stay in line with that of the Chinese Yuan.
Thailand’s economic growth expected to return to 2019 levels in mid-2023
Although the economy would recover next year, the recovery is still substantially below potential level resulting in a large output loss and could affect Thailand’s potential economic growth in the future with the economy expected to return to 2019 levels in mid-2023.
The Siam Commercial Bank (SCB), one of Thailand’s largest commercial banks, said in its latest economic outlook report that the country’s economy may wait until the second semester of 2023 to return to 2019 growth levels.(more…)
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