BOT promotes more use of local currencies in regional trade

BANGKOK, August 21 (TNA) - The Bank of Thailand (BOT) is promoting more use of local currencies in the country's external trade with neighboring countries in the ASEAN Economic Community (AEC) and East Asia. Announcing the policy, BOT Governor Veerathai Santiprabhob told journalists that the move is part of his central bank's measures on supporting the Thai private sector to deal with impacts from the fluctuation of foreign exchange rates amid the current economic crisis in Turkey although the value of the Thai baht against the US dollar has not considerably fluctuated over the past two weeks. Veerathai pointed out that the value of Thailand's external trade with neighboring countries in AEC and those in East Asia, namely China and Japan, accountes for over 50 per cent of the country's total external trade, while Thailand's trade with the United States accounts for only about 9 per cent of the country's total external trade, but up to about 80 per cent of the regional trade relies on the US dollar. The BOT governor suggested that the Thai private sector turn to use more regional currencies suitable for their trade with the regional trading partners, instead. According to the BOT chief, the Thai central bank has already had in place agreements on the use of local currencies in external trade with neighboring Indonesia and Malaysia, while also promoting the more reliance on the direct exchange rates between the Thai baht and the Japanese yen and the Thai baht and the Chinese yuan. The BOT governor said, meanwhile, that the national economic growth rate at 4.6 per cent year-on-year during the second quarter of this year, announced recently by the Office of the National Economic and Social Development Board (NESDB), was in line with the BOT's projection and the BOT's Monetary Policy Committee (MPC) will review, at its next meeting, the Thai central bank's forecast figure of the national economic growth on average in 2018. The BOT governor noted that the MPC will also resolve to raise the Thai central bank's key interest rate whenever it is considered a right time in the coming months in order to be in line with the global financial trend and to protect the domestic property sector from the adverse effect of speculations by investors. (TNA)