Thailand: Baht strength dims export outlook – 28 Jun 2017

  • Currency weakness in some of Thailand’s key developed country trading partners is clouding the outlook for exports despite some otherwise positive signs in 2017, said Wisit Limluecha, vice chairman of the Thai National Shippers’ Council, 27 Jun 17.
  • Wisit said that although the country had enjoyed a rise in exports in the first five months of 2017, the prices for some items, such as rubber sheets, were starting to drop. Rice prices were holding up, and exports to Asean other East Asian countries had expanded. Growth in exports to those markets would likely continue in 2H17, he told a roundtable discussion on the prospects for exports and private investment in 2H17.
  • However, Wisit expressed concerns about the weakness of currencies in some of the big developed countries such as the United States and Britain. He said the baht was now too strong against these currencies, singling out the US Dollar and British Pound. The trend of baht appreciation against these currencies would erode the competitiveness of Thailand’s exporters.
  • The council is awaiting the six-month report card on export performance to make a fuller assessment on the impact from currency trends. Wisit was worried that the US dollar would still be weak even after the expected further rises in US interest rates.
  • Don Nakornthab, a senior director at the Bank of Thailand, told the forum that the central bank would seek to limit the appreciation of the baht. The currency has risen 5.4% against the US dollar in 2017. Against its regional peers, the baht’s performance put it in the middle of the group, he said.

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