BOT:Relieving QE in US weakens Thai baht

BANGKOK, March 20 (TNA) - The Bank of Thailand (BOT) reports that a recent decision by the US Federal Reserve (FED) on further relieving its Quantitative Easing (QE) stimulus measure, effective from next month, has weakened the Thai baht. BOT Spokeswoman Roong Mallikamas told journalists of the development on Thursday, pointing out that the US central bank's announcement earlier this week to reduce its financial injection into the US economy under its QE measure by additional 10 billion US dollars, to 55 billion US dollars monthly, effective from April 2014 was in line with the global expectation and the decision, thus, has slight impacts on international money markets. The spokeswoman acknowledged, however, that the FED decision has caused the US dollar to appreciate against all other currencies, including the Thai baht. Thai Thai currency has, therefore, depreciated in accordance with other currencies in the region, with its exchange rate reported at 32.33-32.35 baht a US dollar on March 20. According to the BOT spokeswoman, the relieving QE shows that the US economy is recovering, which is a positive factor for the Thai and global economies, but the BOT will wait to see whether the Thai economy will really benefit from the development, as the national economic growth rate this year is limited to grow by less than 3 per cent due to impacts from persistent domestic political protests, namely reduced consumption and investment, while it has potential to expand by 4-5 per cent. The spokeswoman noted that the Thai economy can grow in accordance with its potential if the BOT relieves monetary policies to stimulate the national economy and the domestic investment sector catches up with global technological development. Meanwhile, Thanavath Phonvichai, Director of Bangkok-based University of the Thai Chamber of Commerce's Economic and Business Forecasting Center, told reporters that the Thai economy shrank by 1 per cent in the first quarter of this year, the situation of which was close to that during the country's economic crisis in 1997 and massive flooding in late 2011. The senior Thai economist attributed the national economic slowdown to the domestic political problems since last October, saying that 420-430 billion baht has disappeared from the Thai economic system so far. The senior economist projected if Thailand's general election was completed and there was then a new government, the Thai economy should recover in the second half of this year. (TNA)