The baht has gained 5.5% against the US dollar since January and now stands at 30-31 baht per US$, outperforming other currencies in the region.
Thailand’s private sector has expressed serious concern over the strengthening baht, which has rallied to its highest level against the US dollar for six years and may badly affect the country’s exports of agricultural produce and consumer products.
Mr. Boonyasith Chokwatana, chairman of the Sahapat Group, a leading Thai distributor of consumer products, has urged the government to address the problem as a matter of urgency to protect the export sector.
He noted that the ideal baht value against the US$ should be around 34.
Thai Rice Exporters’ Association president Mr. Charoen Laothammatat, said that Thai rice exports this year might not reach the 10-million tonnes target, set by the Commerce Ministry, due to the unusually strong baht.
In July, the association lowered its target for the country’s annual rice exports from 9.5 million tonnes to 9 million. Of the total, white rice will account for 3.9 million tonnes.
According to the latest report by Thailand’s Commerce Ministry, rice exports fell by 26.3 percent to 5.3 million tonnes in the first eight months, while export value slid 22 percent to 2.87 billion USD.
Mr. Titanun Mallikamas, assistant governor of the Bank of Thailand for monetary policy, said that the central bank has been closely monitoring short-term fund inflows, which he described as inconsistent with economic fundamentals. He indicated that the central bank might take measures to curb the short-term capital inflows if they continue.
Mr. Pornchai Thiravej of the Fiscal Policy Office admitted that the ongoing US-China trade war, which has affected Thai exports and tourism, combined with the strong Thai currency, are exerting substantial pressure on the domestic economy.
He said that Thailand is hoping that the G20 meeting in Osaka, Japan, will be able to develop measures to ease the global economic slowdown.