BANGKOK – The Bank of Thailand Governor Dr. Prasarn Triratvorakul said on Monday Thailand has no target for the Thai baht but is pleased to see that it has weakened since April and is moving more in line with regional currencies.
Thailand’s interest rates are near a record low after two surprise cuts this year. But lower rates have done little for the Thai economy as consumers, struggling to pay off record household debt, keep their money in their pockets.
That has led Thailand to seek a boost to its export-dependent economy from a lower currency. But rather than a change in policy, Prasarn said the Bank of Thailand’s steering on foreign exchange was aimed at creating balance after the currency got out of whack with regional competitors in the first quarter.
“Now the baht has corrected a bit and moved in line with other regional currencies,” Prasarn told Reuters. “That’s something we like to see. During the first quarter, the baht went considerably higher compared to regional currencies.”
Prasarn declined to comment on whether he would like to see further weakening in the baht, which hit a six-year low against the dollar on Monday.
On Friday, Thailand’s Deputy Prime Minister M.R. Pridiyathorn Devakula said he would like to see the baht depreciate a little more, although declined to say what he thought the optimal level for the Thai currency would be.
Prasarn declined to comment when asked if Thailand also needed a rate cut to stimulate growth. The country’s monetary policy committee next meets on Aug. 5. The benchmark interest rate stands at 1.5 percent, just above the record low of 1.25 percent.
The central bank last month cut its forecast for economic growth for the year to 3.0 percent from 3.8 percent amid soft demand for Thailand’s exports. It forecast exports would contract for the third year in 2015.