DPM suggests lower key interest rate to stop baht appreciation

BANGKOK, April 25 (TNA) - Deputy Prime Minister and Finance Minister Kittirat Na-Ranong says that he personally views the Thai baht is now too strong, suggesting a lower policy interest rate to stop the continual appreciation of the Thai currency since early this year. Kittirat indicated on Thursday that the Bank of Thailand (BOT) has acknowledged the strong Thai baht; so agencies concerned should seek a solution to the issue, implying a cut in the key interest rate by the central bank. In his Thursday's speech on the development of good governance at listed firms, Kittirat also recommended that listed companies on the Thai stock market increase the number of independent members of their boards to guarantee transparent management and to further develop needed good corporate governance although international investors have already recognized investment conveniences in Thailand. Vorapol Socatiyanurak, Secretary-General of Thailand's Office of the Securities and Exchange Commission (SEC), noted that the SEC and the Stock Exchange of Thailand (SET) have tried to boost confidence in the SET among the international investors and measures to block short-term capital inflows could prompt the international investors to leave Thailand for good, suggesting that many measures be applied to handle the baht value, instead of relying on a single measure. SET President Charamporn Jotikasthira pointed out that there have been some speculative investment funds on the Thai bourse, but such speculators have focused on shares with no strong fundamentals and the SET has already introduced measures to control their speculations. The SET president assessed that currency speculators are not interested in the SET, as they expect the currency fluctuation rate of only 2 per cent, but the fluctuation rate of the SET stands much higher at 25 per cent and investment on the Thai stock market is, thus, riskier than investment in bonds. Meanwhile, Charuek Singhapreecha, Director of Bangkok-based Kasetsart University's Office of Agricultural Economics (KU-OAE) Foresight Center, told a press conference that the strong baht has caused damage worth about 7.7 billion baht to Thai exports of major farm produce, namely fishery products, fruits, chicken, rice, para rubber and cassava, accounting for 4.28 per cent of the overall value of Thai farm exports. Charuek warned if the baht appreciation continues, it will slow down the growth of Thai farm exports, as small-scaled farmers cannot survive when the baht value drops below the rate of 28 baht a US dollar, urging the government to, therefore, implement harsh solutions to handle the strong baht. (TNA)