|
|
.
|
 |
 Investment
|
15 Nov 06 19:26
|
|
|
Central bank urged to act more strictly to oversee baht
|
|
TNA
|
|
|
- Golden tropical hardwoods, marble and granite from world-renowned quarries, traditional ceramics and handicrafts silk from Thailand surround you on every side.
Visit Falcon Hill, Hua-Hin
|
|
BANGKOK, Nov 15 - Thailand's central bank --The Bank of Thailand --should take stricter measures to oversee the movement of the baht, after the local currency appreciated to 36.39 to the US dollar, the strongest in almost eight years, on Tuesday, the Kasikorn Research Centre said Wednesday.
The leading think tank reported although the central bank only recently came up with additional measures to curb speculation on the baht (early this month), Thailand's currency continued to strengthen.
So, money dealers and market observers expected the bank would come up with new measures to more closely supervise the baht's stability.
KRC believed the baht would probably continue to appreciate, and rapidly, particularly if the American economy slows down considerably.
Under the circumstances, the Bank of Thailand is likely to -- and should -- take additional measures to maintain the stability of the baht. One measure is to reduce the policy interest rate.
The strengthening of the baht stemmed in part from a foreign capital inflow into Asian countries including Thailand due to the weakening of the US dollar.
Another reason behind the stronger baht is that local interest rates remain higher than those of most countries in the region.
So, should the bank cut the policy interest rate, it would help narrow a gap between local interest rates and those of other countries. It would help ease the foreign capital inflow into the country to a certain extent.
KRC conceded the implementation of the interest policy might neither help slow the foreign capital inflow nor ease the strengthening of the baht if foreign investors had confidence in the economic and political stability in Thailand.
It suggested that added measures to be taken by the bank to oversee the baht not be too strict because it could affect foreign investor confidence.
Kasikorn viewed the bank should gradually increase the degree of controls to curb speculation on the baht, such as controlling more kinds of business transactions and seeking cooperation from financial institutions to report information in detail and with greater caution. (TNA)
|
|
|
|
 Front Page
 Printer-friendly version
 Mail to friend
|
|
|
|
