You are here
Thai central bank chief says worried about rapid baht gains
[BANGKOK] Thailand's central bank is still concerned about the rapid strengthening of the baht, and has steadily taken action to prevent the currency from rising too fast, the governor said.
The baht's strength has mainly been driven by the country's hefty current account surplus, not "hot money", or speculative fund inflows, Veerathai Santiprabhob told a seminar late on Wednesday.
The baht will remain highly volatile, given external uncertainty and high global liquidity, he said.
"Nobody can tell if the baht will go higher or lower, but it's likely to be more volatile," Mr Veerathai said.
The baht has gained 7.7 per cent against the US dollar this year, making it Asia's best performing currency, and putting further pressure on Thailand's trade-dependent economy amid global trade tensions.
Mr Veerathai also said Thai banks' net interest margins were high - at 2.7-2.8 per cent, double those of banks in Singapore - and should be lower.
There are no clear measures on how to reduce them yet, but the central bank may consider allowing more non-banks to compete in the market, he said.