Discussion set for baht, inflation

The Finance Ministry is scheduled to discuss the inflation framework and exchange rate issues with the Bank of Thailand next week.
According to Deputy Finance Minister Paopoom Rojanasakul, the discussions will focus on finding ways to maintain the exchange rate at an appropriate level given the baht’s recent rapid appreciation.
“The local currency is more volatile against the greenback than the currencies of our regional peers, particularly our trading competitors,” said Mr Paopoom.
The discussions will also cover the economic outlook and the framework for managing inflation, he said.
“We need to sit down and discuss these issues because we cannot allow the currency to continue appreciating, as it is affecting the country’s exports and tourism,” said Mr Paopoom.
He said the baht had risen quickly and become volatile, strengthening from 36 baht per dollar to 33 and beyond, marking a 10% increase, which is concerning.
Commenting on possible baht appreciation if left unchecked, Mr Paopoom said it largely depends on global financial trends.
Interest rates are being slashed in various regions of the world, which has contributed to the baht’s appreciation, he said.
If no action is taken, it could send a negative signal, said Mr Paopoom.
“Thailand’s monetary policy needs to align with global financial trends, as we are not isolated from the rest of the world,” he said.
“If our monetary policy is misaligned with other nations’ policies, we will not be able to address the baht’s volatility. We are an open economy, not a closed one. Issues such as economic geography and monetary policy are crucial.”
Regarding changes to the inflation management framework in 2025, Mr Paopoom said the ministry needs to consult on this matter with the central bank.
Once a conclusion is reached, the details will be made public, he said.