'Only a short-term affair'
Commerce Ministry, BOT play down impact on exporters
The Commerce Ministry has reassured exporters who are concerned about the growing strength of the baht that the currency's appreciation is expected to be a short-term phenomenon.
The Export Promotion Department remains confident that exports will grow by 17.5 per cent as projected, representing an increase in value to US$130 billion (Bt4.96 trillion) this year.
The department's director-general, Chantra Purnariksha, said the baht's appreciation would not have a significant impact on the country's exports.
"The baht will be stronger over a short period, in line with world economic conditions," she said. "The exchange rate should settle at about Bt38 or Bt39 to the US dollar in the near future, and below this it will encourage the country's exports."
She pointed out that exchange rate appreciation had not only affected the baht, but also other currencies. Thai exporters have not been hurt too much because many have planned well by hedging foreign currencies to reduce their business risk.
Bank of Thailand deputy governor Bandid Nijathaworn said at a Nation Multimedia Group briefing that the export sector, which is the major engine of the economy, should not be affected by the recent appreciation.
He said the central bank's focus was to monitor the baht's value against regional currencies and against the dollar. It is not a matter of concern if the unit's appreciation is in line with rises in other regional currencies.
"The Thai baht is not the only currency that appreciates against the US dollar. The appreciation is in tandem with that of other regional currencies, including the Singapore dollar and the South Korean won. Therefore, if the appreciation hurts Thai export competitiveness, exporters in other countries will similarly be affected," he said.
Amid huge inflows, the central bank will ensure that the baht is not too volatile and stays at a level that is acceptable to the private sector, Bandid added.
"Thailand's export competitiveness now relies more on the expansion of export markets rather than foreign exchange rates," he said.
The baht closed at Bt38.13 to the US dollar yesterday, from Bt38.03 on Tuesday.
The Export Promotion Department has prepared plans to achieve the country's targeted export growth and to ensure that the economy continues to be export-driven.
The ministry will call a meeting of 55 commercial counsellors next Thursday to review the export promotion strategies and to consider major factors likely to affect exports, such as the stronger baht and the government's plan to promote Thailand as a regional hub.
The key industrial sectors supporting export growth this year are food, processed food and agriculture, she said.
Meanwhile, collections of One Tambon One Product (Otop) goods will be on display again at Impact Arena, Muang Thong Thani, from Tuesday to Sunday.
The Export Promotion Department's deputy director-general, Benjawan Rattanaprayun, said the Otop fair had been divided into three categories: "Thainess to the World", "Tropical Colour", and "Natural Touch".
The "Thainess to the World" theme will focus on high-end customers and the products will all be of premium quality and top design.
The second group, "Tropical Colour", targets European buyers who are attracted by colourful design.
Finally, "Natural Touch" targets Asia consumers and particularly those in Japan, where goods made from natural materials are popular.
Benjawan said the six-day event was expected to create export trade with a value of Bt500 million, compared with last year's figure of Bt300 million. There is also expected to be a 30-per-cent increase in attendance by foreign buyers. Last year 1,700 foreign companies visited the fair.
The Commerce Ministry said the value of Otop exports last year was $950 million, an increase of 11.22 per cent on 2004. This year, the ministry is aiming for export growth of 18 per cent or 20 per cent for Otop products. This will give Otop exports a total value of $1 billion.
About 50,000 visitors are expected to attend the trade fair. It will be open to the public from next Friday through Sunday.