The
Bank of Thailand warns investors to take precautions against currency
risks after U.S. economic conditions contributed to fluctuations in
exchange rates baht up to 10 percent, although the central bank itself
insists that it is well able to cope with such volatility.
Thai investment abroad, in the first eight months of 2013, touched U.S. $
5,500,000,000 (Bt170 billion), up from $ 7.8 billion in the same period
last year, and fiscal measures are being considered to make it easier
for Thai companies to become more active abroad.
In all of 2012, foreign investment in Thailand amounted to $ 12.7 billion.
Ruengvirayudh
Pongpen BOT deputy governor said the exchange rate volatility
baht-dollar peaked at 10 percent this year mainly due to the U.S.
economic crisis. But the movement of the Thai currency was in line with its regional peers.
He
warned investors not exposed to too much risk to take just a myopic at
once with market volatility is likely to resume if the U.S. changes its
policies.
Investors should consider the potential impacts of volatility and their own ability to absorb them, he said.
Money
markets are likely to see fluctuations, but it is difficult to predict
these precisely because they depend heavily on the economic problems of
the United States. One
of these problems is coming next year is a renewed political battle
over the U.S. debt ceiling, which must be dealt with in February.
But despite the market volatility, the Bank of Thailand says it is willing to keep the baht stable. Although
foreign investment in Thailand could accelerate capital flight, Pongpen
believes that investors should ignore short-term volatility and
long-term plan, as offshore investment help diversify risks and promote long term growth.
The companies in the energy and industry have already settled overseas to reduce production costs.
Much of the investment in Thailand has entered Singapore, as the country has laws that promote the inflow of foreign capital.
Here
at home, the Fiscal Policy Office is considering tax measures to reduce
the costs of overseas investment in Thai companies, including direct
investment and acquisitions. This study is expected to be completed soon.
