May 13, 2013, at 1000 hrs, at Conference Room 301, Command Building, Government House, Deputy Prime Minister and Finance Minister Kittirat Na-Ranong presided over a meeting on the impact of Baht value on Thai economy. The meeting was attended by NESDB Secretary-General Arkhom Termpittayapaisith; Bank of Thailand’s Governor Prasarn Trairatvorakul; Ministry of Finance’s Permanent Secretary Areepong Bhoocha-oom; members of the Monetary Policy Committee; Federation of Thai Industries; Thai Chamber of Commerce and Thai Bankers' Association, as well as concerned private sectors.
After the meeting, Governor of the Bank of Thailand (BOT) revealed that the meeting was a good opportunity to exchange opinions and useful views on the present situation of global economy. The information gathered from the meeting would be taken into consideration for BOT’s operation. Gist of the discussion was about short-term and long-term challenges for Thai economy and businesses in the big picture, as well as lack of labor force, needs to improve national production technology, and long term competitiveness.
When asked about whether there was any other issue of mutual concern at the meeting, the BOT Governor replied that the global economy was still unstable, and that both the public and private sectors must be prepared for subsequent challenges. He added that it was mutually agreed at the meeting on the volatility of the monetary market. Weakening of regional currencies in the past few days was mainly due to the appreciation of US dollar. Such volatility reminded us to be more cautioned. Concerned authorities needed to join forces in tackling the situation in all dimensions, and not only the monetary dimension or exchange rates. “The Deputy Prime Minister stated that this kind of meeting is very fruitful and should be held again with each concerned agency taking turn to host. The Bank of Thailand would be pleased and agree if there is really such arrangement,” said the Governor of the Bank of Thailand.
The Deputy Prime Minister and Minister of Finance revealed that discussion was mainly exchanged in the following 4 issues: 1) Efficiency of the public sector’s expenditure; 2. Enhancement of the investment climate to encourage new investment and the expansion of existing investment; 3. Direction and purchasing power of the consumers; and 4. Export and tourism situation. The meeting came to terms that Thai economy, as a whole, was still on a steady rise, despite the subsequent hardship of the 2011 Great Flood, and the delayed budget reimbursement. As for the export situation, it was agreed that both the public and private sectors should collaborate on not only the regulation of exchange rate, but all other aspects.
The Deputy Prime Minister and Minister of Finance also stated on the Baht’s surge issue that fluctuation of the over-strengthened Baht had had impact on the expansion of export. All concerned agencies must join forces in regulating the Baht stability to enable export growth. Baht value must not be rated only with the US dollar, but also with other currencies of trading and competing partner countries. As for tourism, which was a significant income-generating sector of the country, collaboration between Ministry of Foreign Affairs and Ministry of Tourism and Sports must be initiated. On the sector of production-for-export, the issues of labor skills and lack of skilled labor force were discussed.
Deputy Prime Minister and Minister of Finance added that the policy interest rate as another measure to curb capital inflows was also discussed during the meeting. However, in the overall picture, all concerned sectors mutually agreed that Thai economy growth was still on a stable side, and a goal set for the export growth must be achieved. The private sector did not actually expect the Government to control the capital influx, but wished it use proper measures to maintain proper rate of exchange.