Capital Inflows Drive Baht Appreciation, Says Permanent Secretary of the Treasury

The Permanent Secretary of the Treasury, Mr. Lawan Saengsanit, has attributed the recent appreciation of the baht to capital inflows into the country. This influx of foreign investment has had a positive impact on the capital market, boosting confidence and investment in Thailand.

According to Mr. Saengsanit, the Bank of Thailand (BoT) plays a crucial role in managing the exchange rate, particularly when the baht appreciates rapidly. One of the key effects of a strengthening baht is on exports, which can be negatively impacted if the currency becomes too strong.

“If capital flows in, the baht will naturally strengthen, but to a lesser extent, I believe it can be controlled,” Mr. Saengsanit said. “This is already having an impact on exports, but a weak baht is good for imports, so there must be a balance.”

In the short term, the baht’s strengthening is a sign of improving confidence in the capital market. However, Mr. Saengsanit emphasized the need to maintain an appropriate exchange rate to support exports.

Key Takeaways

• Capital inflows are driving the appreciation of the baht.
• The Bank of Thailand (BoT) plays a crucial role in managing the exchange rate.
• A strengthening baht can negatively impact exports.
• A balance must be struck between a strong baht and a weak baht to support both exports and imports.