BOT takes FTI to task as baht hits higher rate
The Bank of Thailand (BOT) has criticised the Federation of Thai Industries (FTI) for its proposal to have the authorities maintain the baht's exchange rate at 38-39 to the US dollar, saying the FTI had come up with a very unrealistic proposal that did not fit reality.
"They like to daydream. They're a group of industries and have different ideas. So the situation might be bad for the industrial sector - we have to look at the real world and decide what is possible and what is not. No one knows," said BOT governor MR Pridiyathorn Devakula. However, the governor said the central bank had already helped protect the baht from high volatility. He suggested the industrial sector look not only at the baht/dollar exchange rate, but also at other major currencies, as well. FTI vice president Nipon Surapongrakcharoen said yesterday that during today's meeting of the FTI, the Board of Trade and the Thai Bankers Association, his agency would propose the government, mainly the Finance Ministry and the BOT, maintain the baht at a level of 38-39 to the dollar. "The exchange rate has been volatile and the baht extremely strong," he said. The FTI also proposed that the Bank of Thailand increase foreign-exchange reserves from US$57 billion (Bt2.13 trillion) to $60 billion and keep the inflation rate below 5 per cent. He said that if these factors were under control, the private sector would operate their businesses in a stable and competitive environment. The baht opened yesterday at 37.50/37.58 to the dollar, a three-month high. BankThai's treasurer attributed the strengthening to the dollar weakening as the US economy slows, as well as an inflow of dollars into the Stock Exchange of Thailand. The baht ended yesterday at 37.46 to the dollar. Business Reporters The Nation
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