However, he told reporters that further strengthening could cause some harm.

Pridiyathorn said on Thursday that in February exports grew 23 per cent on the year, while imports were up 15 per cent.

In line with the strengthening baht, Thailand's foreign reserves as of March 17 had grown to US$54.8 billion (Bt2.1 trillion), compared with $54.5 billion a week earlier.

Exim to assist in Lao bond issue

The Export-Import Bank of Thailand will help the Lao government issue Bt2 billion-Bt2.5 billion in baht-denominated bonds in the next few months.

"The issuer is Electricite Du Laos, the best state enterprise in Laos, but Exim Bank will provide a guarantee to attract institutional investors," said Sataporn Jinachitra, president of Exim Bank.

He said the proceeds would be used to buy a stake in the Nam Nguem 2 hydropower project in Laos, which is majority-owned by the Lao government.

Exim Bank's support is part of the Thai government's commitment to promote the development of the Asian bond market. Under the plan, Exim Bank will act as a key agency to help less-developed neighbouring countries issue baht bonds in the Thai market.

BOT takes close look at AIG case

Samart Buranawatanachoke, assistant governor of the Bank of Thailand, said yesterday that the central bank needed to interpret whether the US Securities and Exchange Commission probe of American International Group's accounting procedures is a prelude to a criminal or civil lawsuit.

If it turns out not to be a civil case, the BOT would have to review the status of its retail bank application. The company recently set up AIG Retail Bank, but has yet to start operations pending the central bank's decision.

GHB hikes its interest rates

The Government Housing Bank is offering a 4.5-per-cent interest rate for six-month deposits as a special campaign available from March 27 to April 30, requiring a minimum deposit of Bt10,000.

On March 10, the bank announced a rate hike of 25 basis points across the board. Its three-, six-, 12-, and 24-months deposit rates were raised to 3.5 per cent, 3.75 per cent, 4 per cent and 4.25 per cent, respectively. The bank's 36- and 60-months deposit rates were raised to 4.5 per cent and 4.75 per cent.