Bank of Thailand Encourages Foreign Investment for 2010

Published : January 29, 2010 :: 09:01:06 [ 1,075 views ]

The Bank of Thailand (BoT) is set to issue next week added measures to encourage private-sector investment abroad and liberalisation of capital flows. Delivering a policy statement in this week, BoT Governor Tarisa Watanagase said last year’s economic crisis was the world’s worst in 60 years. It had changed the global economic structure, resulting in a slower economic growth than before.

Bangkok, the 29th of January 2010 [TNA]: In this scenario, the economic mechanism needs to be adjusted to ensure sustained economic growth, so the central bank will give importance to policy implementation in three issues. First, it will closely monitor the currency exchange rate to prevent it from being overly volatile and prepare a response to cope with the capital flow into Asia.

“Next week, the central bank will issue a measure to ease the capital flow by the private sector and facilitate money management. It is an additional measure issued to encourage the private sector to invest overseas,” she said.

Asked to comment on the greater role of the Chinese yuan in the global economic system, Mrs. Tarisa said the yuan would not yet be able to replace the US dollar because the greenback remains highly liquid. Although hedge funds will prefer speculating on the yuan, they would not count on Thailand as a place to keep money for speculation on the Chinese currency.

She predicted that this year incomes earned from exports would reach US$10 billion, those from investment in debt instruments $1.5 billion, and those from investment in the capital market $1 billion. The central bank would also adopt an eased monetary policy due to the economic recovery. She expected the economy this year would grow 3.3-5.3 per cent.

The relaxation of fiscal and monetary policy is rather sensitive and needs perfect timing. Should the policy ease too quickly, it would negatively affect economic expansion, but if the interest rate is too low, it would fuel inflation and lead to an economic bubble.

The central bank will also encourage Thai financial institutions to lend to small- and medium-size business sector, which is considered a key economic base. The bank is confident the Small Business Credit Guarantee Corporation will be able to lend Bt30 billion within March.

Mrs Tarisa allowed that the country’s rising political temperature remains a key risk factor that needs to be monitored and tackled because it could discourage private investment and long-term economic recovery. (TNA)

Comments

materialsman

said :

Encourage foreign investment? That will be a first! A couple of years ago I put 1 million baht into a higher interest account at Bangkok Bank, just before the first interest became payable I received a call from the Bank saying I had seven days to close the account as no interest would be paid to me as I was a falang, go figure!

Email : kroderick@cuel.co.th Date : 2010-01-30 08:06:44

gary

said :

China has as many economic problems as the West it just doesn't discuss them in the press.
Millions are out of work and huge areas of industrial land are abandoned. My last trade trip there discovered that two thirds of the suppliers we used last year are gone.

No country that relies hugely on the west for its income from exports can be doing anything but badly at the moment.
Thailand would be well advised to stop moving towards China in such a large way or it may find out that the foundations of China are built on sand

Email : gary-is@blueyonder.co.uk Date : 2010-01-30 07:13:49

astonished

said :

One important thing the bank doesn't tell you, if you invest money in here, and later for whatever reason, decide to sell out and return to your country of origin, it's very difficult, if not impossible, to transfer funds FROM THAILAND to a bank in another country.
A good rule to live by, bring nothing here that you want to keep, especially MONEY.....

Email : foolednomore@icclearly.com Date : 2010-01-29 18:47:42

Hot News

Sponsor

Pattaya Daily News