BoT monitors economy during bereavement
The central bank is keeping a close eye on the economy in the expectation that some business activities may slow down during the mourning period for His Majesty the King.
“Amid the bereavement, business and economic activities in some areas may cool down, so the central bank will further monitor the situation,” said Bank of Thailand governor Veerathai Santiprabhob.
He said the capital, financial and foreign exchange markets have returned to normal after last week’s panic selling, thanks to strong economic fundamentals on the back of a sound fiscal position, foreign reserves and financial institutions.
The SET index has bounced back after the market’s free fall, which reflected the confidence of both local and foreign investors.
The stock market went into a nosedive, sliding almost 100 points or 6.9% during intraday trading on Oct 12 before clawing back to close the day at 1,406.18 points — a 2.5% retreat.
Turnover that Wednesday hit a record 130 billion baht.
The roller coaster continued on Oct 13 when the SET index slipped below 1,400 points shortly after the curtain was raised, sinking by 3.5% to a trough of 1,356.79 points before buying emerged just 10 minutes ahead of closing to push the main gauge up 0.5% to 1,412.82.
The SET index inched 0.5% higher yesterday to close at 1,500.37 in trade worth 48.5 billion baht.
Deputy Commerce Minister Suvit Maesincee said export value in September, which is due to be announced on Oct 27, still grew for a second month running as Thailand’s shipments showed greater potential than those of several other countries.
Export growth is expected to be in a range of 0-1% this year, he said.
Thailand’s exports unexpectedly rose for the first time in five months in August. Shipments grew by 6.5% yearon-year in August to US$18.8 billion (660.2 billion baht), the highest level in six months.
The surge helped narrow the eightmonth contraction to 1.2% year-onyear to $141 billion.
Mr Suvit said Prime Minister Prayut Chan-o-cha’s policy to boost domestic demand to shield impact from the global slowdown is the right approach.
Thailand should not stick to income from exports, as they are in a downward trend in line with the global economy, he said. Rather it should rely on foreign direct investment, while encouraging outward investment as well.
The government, however, is focusing on the export service sector because of its thriving prospects for the future, Mr Suvit said.
“We need to accept that some economic activities in the final quarter may be affected, but our economic fundamentals remain sound,” said Roong Mallikamas, senior director of the central bank’s macroeconomic and monetary policy department.
“The financial and capital markets are resilient. The Thai economy still has stability.”
State investment and tourism can offset the tepid exports and the government has launched economic stimulus measures to assist some areas that have problems, she said.
The Bank of Thailand has forecast Thailand’s economic growth to come in at 3.2% this year.
Kiatipong Ariyapruchya, a World Bank economist, said the Thai economic rebound has been concentrated in some sectors such as transport and tourism.