(Bloomberg) -- The Bank of Thailand said it stands ready to tamp down on excessive baht volatility as it headed to an 11-month low, hours after the country’s leader said a weakening currency will benefit its tourism and exports.
Prime Minister Srettha Thavisin said on Tuesday that the government won’t intervene in the foreign exchange market to stem baht’s slide as its weakness “can yield benefits for exports and tourism” — the country’s key engines of growth. He acknowledged that the BOT is in charge of managing and monitoring the baht.
The central bank issued a statement later in the day, saying it “may consider taking care of the baht if it fluctuates abnormally,” impacting companies. Gold prices that have dropped to the lowest in seven months and oil costs that have risen to the most in a year have weighed on the baht, according to Sakkapop Panyanukul, BOT’s senior director for financial markets department.
Srettha’s remarks on the baht come after his meeting with BOT Governor Sethaput Suthiwartnarueput on Monday, the first of their monthly discussions to reconcile any differences between fiscal and monetary policy directions.
Sethaput had been vocal about his concerns on how Srettha government’s stimulus measures could stoke inflation. At the same time, local media including Post Today and Krungthep Turakij had reported that the government was unhappy with BOT’s move to bring interest rates to a decade high last week.
The baht has lost 5.5% against the dollar in the past month, the worst performance among the 12 Asian currencies tracked by Bloomberg.
Separately on Tuesday, the BOT appointed two new members to the Monetary Policy Committee while extending the terms of Paiboon Kittisrikangwan and Rapee Sucharitakul for three more years.
Outgoing Siam Cement Pcl Chief Executive Roongrote Rangsiyopash and economist Santitarn Sathirathai will join the monetary panel from Nov. 1, according to the BOT.
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