Thai baht (Source: thethaiger.com)Bangkok (VNA) – The Bankof Thailand is preparing measures to control short-term capital inflows, whilecontinuing to relax restrictions on outflows to cope with the strong baht,according to minutes of a policy meeting last month.
The monetary policycommittee (MPC) felt rapid appreciation of the baht might not be consistentwith economic fundamentals and could impact economic growth, according to theminutes of its June 26 meeting released on July 9.
At the meeting,policymakers left the benchmark rate unchanged at 1.75 percent.
Given moderatingeconomic prospects, current economic data from various sectors reflected thatthe Thai economy would be more sensitive to currency appreciation, the minutessaid.
The committee deemed itnecessary to prepare short-term capital inflow management measures ready to beimplemented at an appropriate time, as well as to continue relaxing morecapital outflow regulations to encourage a greater flow of outward portfolioinvestment by residents.
But the minutes did notsay what measures would be implemented.
On July 8, governorVeerathai Santiprabhob said the central bank was not happy with "hot"money moving into the country and was ready to impose measures if inflows wereunusually large.
The baht has risenabout 5.6 percent against the US dollar this year, becoming Asia's bestperforming currency. That has put more pressure on Thailand's export-driveneconomy at a time when global demand is cooling and the US-China trade war isdisrupting supply chains worldwide.
The BoT projectseconomic growth will slow to 3.3 percent this year, from last year's 4.1percent, but it is counting on a second-half rebound that some analysts doubtwill materialise.-VNA
VNA
