By Kitiphong Thaichareon and Orathai Sriring
BANGKOK (Reuters) -Thailand’s finance minister said on Wednesday that he had urged the central bank to ensure the Thai baht is not too volatile, as the government rolled out measures to boost consumption and tourism to revive the struggling economy.
The new government under Prime Minister Anutin Charnvirakul has pledged to turn around an economy struggling with U.S. tariffs, high household debt, weak consumption, and a strong baht.
The baht’s earlier appreciation was largely due to a high current account surplus from accelerated exports in the first half of the year as well as inflows into the bond market, finance minister Ekniti Nitithanprapas told reporters.
“The principle is to prevent currency speculation and volatility,” he said.
Despite a recent decline, the baht has still risen by 6.2% against the dollar so far this year.
Ekniti questioned the efficacy of trying to tackle the appreciating currency through a proposed tax on gold transactions, which has already been opposed by traders.
“Gold trading is not a major factor behind the baht’s strength, as its dollar-converted value is not significant,” he said.
Ekniti said stimulus measures worth 66 billion baht ($2.04 billion), including a co-payment scheme, are expected to lift fourth-quarter GDP growth to more than 1%.
Ekniti’s remarks came as Vitai Ratanakorn assumed his role as the new central bank governor on October. 1. Vitai vowed to maintain the Bank of Thailand’s independence while collaborating with the government to address economic challenges.
“The central bank remains firm in its primary mission to ensure macroeconomic stability,” Vitai told reporters. “However, we must uphold our independence from political pressures.”
The central bank has predicted economic growth of 2.3% this year and will review the projection at the next rate meeting on October 8. Some economists expect a further rate cut, from a near three-year low of 1.50%.
On Wednesday, the Joint Standing Committee on Commerce, Industry and Banking maintained its 2025 growth forecast of 1.8%-2.2%, citing limited export growth of 2%-3% due to the baht’s strength.
It also recommended setting up a sovereign wealth fund as a tool for the central bank to balance the exchange rate during a period of baht appreciation.
($1 = 32.34 baht)
(Reporting by Kitiphong Thaichareon and Orathai Sriring; Editing by John Mair and David Stanway)
