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Published on January 18, 2008

She warned them not to assume that the baht will continue to appreciate. Amid economic and financial fluctuation, the currency could be much more volatile.

Exporters and importers have hedged their dollar incomes and costs but they should do so continuously and regularly, said Tarisa.

"They should actually analyse things from different angles. If they have strong belief in only one view, it would be risky," said the governor.

The baht has continued to appreciate since the beginning of the year due to the depreciation of the US dollar, as panic over the sub-prime mortgage fiasco remains.

Yesterday, the baht opened at 33.13-33.15 and closed at 33.10-33.13.

Moreover, exporters put additional pressure on the baht when they hastened to sell off their dollars amid fears of continued appreciation of the baht, while importers have slowed down purchase of dollars, hoping to buy foreign currency even cheaper.

Tarisa said the central bank had not found any signs of speculative activity from foreigners or Thai banks.

The market has differing opinions on the trends for the dollar. Some analysts believe the dollar will continue to depreciate because of the economic recession in the world's largest economy and the unresolved sub-prime mortgage crisis.

But some are of the view that the dollar's value will rebound, because it has already fallen too steeply over the past few years. Capital flows would possibly return to the US to shop for cheap real estate and to buy recapitalised stocks of troubled banks.

Experts feel an increase in imports would help slow down the appreciating baht. But Tarisa said domestic investment recovery and private consumption could determine whether imports would pick up.

"We should let domestic demand be the hero in driving the economy, rather than exports," she said.

Anoma Srisukkasem

The Nation