Thailand needs no emergency measures

He believed that the Thai and regional exchanges would react positively to the US Federal Reserve Board's decision to slash its benchmark rate by 75 basis points.

 

The US central bank on Tuesday cut its base short-term interest rate by three quarters of a per centage point to 3.50 per cent amid worries a potential US recession could destabilise the world economy.

"The cut is deeper than expected. This is a positive sign as the rate cut would send a positive impact to the global financial markets and shows the Fed's readiness in tackling the problems at home. But in Thailand, we would need no urgent meeting on emergency measures. The Thai exchange and the baht would move in line with regional movements," he said.

 While the exchange is expected to move up in line with regional bourses, Chalongphob foresees the slight depreciation of the Thai baht against US dollar due to foreign sell-offs in the exchange and capital outflows.

Thailand Development Research Institute (TDRI) research director Somchai Jitsuchon however said that the steep rate cut indicates the worse-than-expected slowdown in the US economy. While the problems have hit the Thai exchange, the export sector could be the next to be hurt following lower demand.

 He said that the Thai export growth could be less than 10 per cent this year.

 

- The Nation