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Thai Baht to remain volatile next year

Emerging markets, particularly in Asia and Thailand, would become interesting places, because they would lead the economic recovery, while the US would remain an interesting market because of attractive asset prices.

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Bank of Thailand (BoT) Governor Prasarn Trairatvorakul  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.

via Baht to remain volatile next year, says BOT chief.

The Bank of Thailand (BoT) raised the policy interest rate to 2%

The Bank of Thailand (BoT) on Wednesday raised the policy interest rate by 0.25 per cent from 1.75 to 2.00 per cent, effective immediately, BoT Assistant Governor Paiboon Kittisrikangwan said.

The decision was made by the Monetary Policy Committee.

It is less important to maintain the current extra-accommodative monetary policy stance when Thailand’s economy is expected to grow at 7-8 per cent this year and 3-5 percent next year, Mr Paiboon said.

As a result, the interest rate should be readjusted to a normal rate after the BoT kept it low for the past two years.

The Monetary Policy Committee raised the interest rate by 0.25 per cent at its last two meetings, in July and August, consecutively.

New Investors focus on emerging markets

Emerging markets, particularly in Asia, would become interesting places, because they would lead the economic recovery, while the US would remain an interesting market because of attractive asset prices.

The appreciation of the Thai baht is not caused by capital inflows but the Bank of Thailand (BoT) has been asked to keep a close watch on the currency’s appreciation and prepare measures to cope with capital inflows for currency speculation as the monetary unit hits a two-year high, Finance Minister Korn Chatikavanij said.

The finance minister told reporters that the meeting resolved that the weak US economy and its debt burden has pushed the baht to become stronger in tandem with other currencies.

1 Comment

1 Comment

  1. thailand travel guy

    December 12, 2010 at 3:31 am

    It would be nice if clarification can be given as to what this will do to the big currencies against the baht. Total topsy turvy or ?

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Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

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Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN PEETATHAWATCHAI:

PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point. 

As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.

In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?

PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
 

 

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Economics

Youth unemployment hits new highs in Thailand due to COVID-19 restrictions

BANGKOK, Thailand (ILO news) – Joblessness among young men and women in Thailand has reached a level unseen in recent years due to the impact of the COVID-19 pandemic, according to a new brief from the International Labour Organization (ILO).

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Coronavirus disease 2019 (COVID-19) WHO Thailand Situation Report - 22 February 2021

The Thailand labour market update  found that youth employment fell by 7 per cent in the first quarter of 2021 (from the fourth quarter 2019). The youth unemployment rate increased by 3 percentage points for both men and women, reaching a high of 6 per cent and 8 per cent, respectively.

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