Bangkok, the 11th of September 2010: Based on the results of a survey of 39 industrial groups affected by the continued appreciation of the baht, FTI chairman Phayungsak Chartsutipol urged BoT Governor Tarisa Watanagase to intervene on the situation, which risks crippling certain export-orientated industries.
Among those most heavily affected, based on the FTI report, include, clothing, textile, ceramic, processed goods and the agricultural industries. Over 40% of the worst affected industries included sawmills, wood treatment factories, air conditioning manufacturers, packaged food processing facilities and auto parts manufacturers (export).
Exports, although affected in general, are hardest hit when using locally produced raw materials, with air-conditioning exporters reportedly suffering an estimated 7% drop in sales and the auto parts exporters a staggering 10% decline in the last 12-months.
Mr. Chartsutipol, as a representative of private industries, asked the Bank of Thailand to intervene on the currency market, helping to bring the baht closer to regional counterparts in order to boost competitiveness and ease the financial burdens on exporters.
BoT Governor Ms Watanagase however only last week asserted that no intervention in the currency market was necessary given the bahts movement in line with the top-10 most-actively traded currencies in Asia.
Although all Asian currencies have strengthened during the last 12-months amid the U.S and global recession and European debt crisis, the bahts appreciation is second in the region at over 6%. Countries such as Vietnam and Indonesia have gained on Thailand’s export dominance as a result, with the FTI now worried that the appreciating baht will continue to hamper Thai exporters push to compete in key fields such as automotive parts, textiles and finished goods.
At the time of the Mr. Chartsutipol’s comments on Friday, the baht was trading at 30.81 to the U.S. dollar, a 13-year high.