BoT says Thailand would be slightly affected if Fed raises rates

BANGKOK, September 17 (TNA) -- Governor of the Bank of Thailand (BoT) Prasarn Trairatvorakul said Thursday that the kingdom would be slightly impacted if the US Federal Reserve increases its rates because of its high international reserves which are sufficient to settle oversea debts. Mr Prasarn told participants attending a seminar that Thailand is facing changes of global monetary and the country has to adapt itself for the declining of its exports by adjusting export structure and to focus on added value of goods production. As the Fed may decide to hike its interest rates, Mr Prasarn said that Thailand’s international reserves stand around 170 billion US dollars, higher than oversea debts totaling approximately 130 billion US dollars. The country’s current account enjoys a surplus as high as 20 billion US dollars, therefore, the country has no problem to pay off its debts. Transfer of capital by foreigners is insignificant because they hold 8 per cent of government and the central bank bonds, and 30 per cent on Thai stock market. Most of their investment is on a long-term basis, said Mr Prasarn. Touching on a decision by the BoT’s Monetary Policy Committee to maintain policy rate at 1.5 per cent, Mr Prasarn said the decision was made because of high volatility in the monetary market. The present interest rates and the baht value are in favour of the country’s economic expansion and in line with the value of other regional currencies which moved moderately compared to currencies of developing countries. He said what foreign and Thai investors are worried is an uncertainty in Thai politics, forcing foreign investors to delay investment in Thailand. (TNA)