The Bank Of Thai Warning Upon Currency Rising

The Bank of Thailand warned Thursday that it was powerless to prevent further appreciations next year of the baht against the dollar after the Thai currency has risen 13 per cent against the dollar so far this year.

Bank Governor Tarisa Watanagase said external factors such as an economic slowdown in the United States and a possible appreciation of the Chinese yuan would continue to shift funds into Asian economies such as Thailand, where growth was expected to exceed 5 per cent in 2007.

The central bank chief, addressing a seminar of Thai businessmen, noted that while the bank had put in place various measures to curb speculation on the baht, it could do little to control the 1 trillion dollars circulated worldwide on a daily basis, the Thai News Agency reported.

Tarisa advised the Thai business community to pay close attention to the yuan as an appreciation of the currency against the dollar would make all regional currencies strengthen against the greenback.

Next year would be a good year to import capital goods because the dollar was down, she said.

Tarisa reiterated that the bank would not resort to interest-rate reductions to cope with the baht appreciation because it might send the wrong signal to foreign investors that the central bank wanted to stimulate the economy, which would lead to more foreign capital inflows.>