The Thai government should impose added measures to control the foreign capital influx, or the current financial uncertainties will continue unabated, according to a top fund manager.

Pichit Akrathit, Executive Director and President of MFC Asset Management Pcl, said Bt160 billion in foreign capital had flowed into Thailand since early this year, resulting in the continued appreciation of the baht.

He said that foreign capital had overwhelmed Asia since the United States adopted a low interest policy in the hope of reviving its ailing economy. The move caused capital to flow into the region, particularly Thailand.

Mr Pichit conceded the interest hike could help slow the foreign capital inflow, but the Bank of Thailand remained hesitant to do that because it is concerned about rising inflation.

via More measures expected to contain capital inflow, says fund manager.

The private sector advises the Government to adjust interest rate so as to prevent over capital inflow, a cause of baht appreciation.

foreign currencies
Foreign investors are still going for Thailand despite political crisis lingering on.

CP Group’s Deputy Chairman Archva Taolanon viewed that intensive capital inflow was a cause of baht appreciation. He said the baht currency at the moment was at 30.60 THB/ USD and likely to be stronger. By this year-end the baht value may be as strong as 29 THB/USD, if the Government does not adjust the policy interest rate.

However, Mr Archva stated that the operators should grab the chance for their business such as investing on machinery and expanding investment abroad.

According to the Small Business Credit Guarantee Corporation, the capital flows into Asian region so far is around 160 billion THB. The Bank of Thailand thus is required to manage interest rate and exchange rate, so as to slow down baht appreciation.

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

Asia Likely to See Dynamic Economic Growth says IMF

Region would contribute more than 70 percent to global growth this year—but still faces challenges from inflation, debt, and financial vulnerabilities

Thai Inflation Falls for Fifth Straight Month

Thailand’s inflation rate fell for the fifth straight month in May amid lower electricity and fuel prices. However, experts warned that inflation could rebound due to a possible increase in minimum wages and the upcoming drought season.

Thai GDP falls short of expectations with 2.6% growth

Thailand’s growth fell short of forecasts, as a robust rebound in domestic consumption and tourism was unable to make up for the weakening export sector.