Thai central bank intervenes to slow baht's rise

Thai central bank intervenes to slow baht's rise

	Published : Thu, 05 Jul 2007 10:06 By : Agencies Print this Story

BANGKOK, Thailand (Thomson Financial) - The Bank of Thailand said Thursday it has stepped in to the currency market to slow the sharp rise of the baht in response to calls from Thai exporters, as the local currency moved past the 34 to the dollar mark.

The Thai unit, which has risen by about six percent since the beginning of this year, was trading at 33.95 baht to the greenback on Thursday afternoon.

Strong inflows into the stock market and massive currency buying by exporters have pushed the baht to its highest level since July 2, 1997, when the central bank floated the unit.

The currency was even stronger in offshore markets, where it was quoted at around 31.20 on Thursday, despite the central bank's efforts to rein in the currency.

'We have been trying to slow the baht's sharp rise this week,' said BOT governor Tarisa Watanagase.

Her remarks contradicted a BOT statement Wednesday, when deputy governor Atchana Waiquamdee said the central bank saw no need to intervene.

'We are not looking at a specific rate for the baht, but making sure that the speed of the appreciation is in line with other regional currencies,' Tarisa said, adding the baht's rise was a result of foreign inflows into the stock market.

Foreign investors have bought over 100 billion baht worth of Thai stocks so far this year.

But Tarisa said the strong inflows would be only short-term, citing the slight drop of the Thai index on Thursday.

The stock exchange slipped 0.35 percent in morning trade, after closing at a fresh 10-year high on Wednesday. The index which ended the morning session at 822.59 points was though, still at its highest level since the 1997 financial crisis.

The rising baht has drawn complaints from exporters who fear that the exchange rate is making Thai products too expensive overseas.

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