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Strong baht sends jitters through Thai export sector

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 export

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UTCC: Thai export sector to be affected by US-China trade war

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 exports are likely to stay below targets as the strong baht weakens competitiveness in the world market (Photo: Bangkok Post)

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.

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Forex

Thailand Futures Exchange (TFEX) expands on the back of trade war

The baht has strengthened to a six-year high and it is likely to further appreciate. This is an opportunity for investors to invest in the low-risk Thailand Futures Exchange (TFEX) market.

National News Bureau of Thailand

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BANGKOK, 15 September 2019(NNT) – The Thai economy is experiencing a slowdown mostly due to several external factors, particularly the volatile global economy and the ongoing trade war between China and the United States.

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Banking

Relentless rise of Thai baht causes exporting concerns

Commerce Ministry officials fear that continued currency strength could hinder Thai exports.

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The Thai baht has been relentless in its pursuit of the dollar, with the baht set to finish the financial year once again as one of Asia’s strongest performing currencies.

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Economics

A challenging Baht for the Thai economy in 2019 ?

Exporters are increasingly worried as the Thai baht continues to perform against the US dollar

Olivier Languepin

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Thanks to Thailand’s walloping US$207 billion of foreign reserves, Thai baht’s climb of about 5% against the dollar in the past six months is the strongest in the world, according to data compiled by Bloomberg. 

This may be good news if you plan to travel abroad, but not so good if your business is exporting Thai products.

According to KBank forecast, the baht’s value could appreciate to 31.50 against the US dollar this quarter because prevailing global financial volatility is poised to compel investors to seek refuge in new safe-haven destinations.

“It will be tough this year,” said Duangrat Prajaksilpthai to the Bangkok Post, an economist at TMB Bank.

“Exports were already expected to slow down because of the impact of the trade war. Baht strength on top of that will curb export revenue when converted to local currency.”


Duangrat Prajaksilpthai, economist at TMB Bank.

The Bank of Thailand raised its benchmark interest-rate in December for the first time since 2011, by a quarter point to 1.75% , but the baht’s climb could complicate the central bank efforts to normalize policy by weighing on already below-target inflation.

Thailand’s current account balance accounted for 10.8% of GDP in 2017, thanks to increasing tourism revenues, is also the eighth highest in the world, based on data compiled by the International Monetary Fund.

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