[Update-2] Prawit backs down from statement of asking for Thai Baht to be around 35 to US$ as currency continues its downward trend

Listen to this story

Acting Prime Minister General Prawit Wongsuwan said the government was not trying to interfere with the weakening Baht after suggesting that the most suitable level for the currency is 35 Baht per US dollar.

“No, not related,” he replied to reporters after they asked him whether the government was trying to interfere with the Baht movement or not.

“You have to go ask the economic team as I have only instructed them to monitor the situation,” he said.

Gen. Prawit said on Tuesday and again on Wednesday that the Baht should be trading around 35 Baht per US dollar instead of the current level of around 37 Baht per greenback.

He also instructed Finance Minister Arkhom Termpittayapaisith to oversee the Baht situation. The minister said that he will meet with representatives from the Bank of Thailand (BoT) about the weakening Baht.

The finance minister did not clarify when the meeting will take place.

The BoT said on Wednesday that they will not be commenting on the Baht movement at the moment because they are now entering the “silence period” ahead of its Monetary Policy Committee’s meeting which is scheduled to take place on September 28.

The central bank stated earlier that they saw no irregular movement of fund flows that would affect the Thai Baht.

It has been reported that the BoT has used up more than US$ 19 billion since the start of this year to defend the Thai Baht from continuing to depreciate against the US$.

The Baht depreciated to 16-year low on Thursday as the US dollar jumped to 20-year high after the US Federal Reserve hiked its interest rate by 0.75% to the current range of 3-3.25%, its third 75 basis points hike in a row as the country is trying to control inflation.

The Fed also hinted at further aggressive hikes with a prediction that its interest rates could be hiked to as high as 4.6% next year before ending its fight against inflation.

The Baht was trading around 37.38 Baht per US dollar at noon, its lowest level since September 2006.

[Update-1] Former finance minister Korn Chatikavanij from the Chart Pattana Party said on Thursday the Baht is weakening because of the stronger US dollar and it might be problematic in short term but there is no crisis at the moment.

He also said the government should not set a target for where the Baht should be.

“A crisis could happen if we announced that we will fight against the appreciation of the US dollar by setting a target that is going against the market, no matter if the target was set at 35 Baht or other rates,” he said.

“The gap between the US interest rates and Thailand’s policy interest rate will definitely affect the Baht until the US economy slows down and its inflation started to decline to the point where they can lower thier interest rate which is expected to be next year,” he said.

He said once the US economy slows down, the energy and product prices will come down and that will eventually lead to an appreciation in the Thai Baht, especially if Thailand’s current account becomes stronger from lower import costs and higher tourist income.

[Update-2] Finance Minister Arkhom Termpittayapaisith said after meeting with the Bank of Thailand on Thursday that the government will not interfere with the weakening of the Thai Baht and it will be up to the central bank to figure out what to do with the policy interest rate.

“The finance ministry and the BoT have been closely monitoring the situation after the Fed decided to hike thier interest rates by 0.75% and the Thai economy has been affected by the global economic condition, energy prices and the war but in terms of the question whether Thailand has to increase its policy interest rate or not, that will be up to the decision of the BoT,” he said.

Arkhom said the ministry did not provide any instruction to the BoT and he also commented that the global oil prices are “stable” at around 90-95 USD per barrel which is “a good level” for now but the prices could be fluctuating during the winter season in Europe.

The finance ministry maintained that the Thai economy will be able to expand by 3-3.5% in 2022 from export that is being supported by the weak Baht and the return of tourists after the reopening of the country.


Ivermectin not effective in treating Covid-19, joint Mahidol-Oxford study shows

Ivermectin is not shown to be effective against Covid-19 in clinical trials according to the findings of a joint...

Latest article