Thailand not seriously affected by China's weakening yuan

BANGKOK, August 13 (TNA) - Thailand has not been seriously affected by the depreciation of China's yuan, by 4.7 per cent against the US dollar over the past three days, thanks to the country's high foreign exchange reserves of 160 billion US dollars. Thai Finance Minister Sommai Phasee told journalists on Thursday he had discussed the issue with Bank of Thailand (BOT) Governor Prasarn Trairatvorakul, who assured him that the situation remains under control, as the Kingdom has foreign exchange reserves as high as 160 billion US dollars, which should cushion economic volatility, if any. Sommai assessed that impacts on Thailand’s exports should not be serious either, as most of Thai exports to China comprise major factors of production, namely plastic resins, rubber, tapioca products and computer parts, rather than more vulnerable consumer products. For impacts on the Thai tourism, Sommai said he personally believed that the domestic tourism should neither be seriously affected by the weakening yuan although as many as 4.6 million Chinese nationals visit Thailand annually, foreseeing that more Chinese visitors should even travel to Thailand when the Chinese economy expanded. According to the Thai finance minister, China is now the world's second largest importer and exporter and Beijing's decision on depreciating the Chinese currency earlier this week was because the Chinese government had limited choices in monetary policy and opted to devalue the yuan. The finance minister noted that the depreciation of the Chinese yuan has posed less impacts on the Thai baht than other regional currencies, pointing out that the Thai baht has weakened by about 0.25 per cent against the US dollar, while Indonesia's rupiah has fallen by 1.6 per cent and Malaysia's ringgit by 4 per cent. On the declining Stock Exchange of Thailand (SET) index, the finance minister mentioned impacts from news reports on a possible Cabinet reshuffle in the near future as a major cause, as they have affected investors' confidence in the Thai economy, suggesting that concerned parties speed up building up confidence among the international investors in order to draw more investment projects into the Thai economy. (TNA)