Thailand not worried by Vietnam Dong devaluation

The devaluation of Vietnam’s dong by another two per cent early this week will not have any appreciable impact on Thailand’s rice exports, Commerce Minister Porntiva Nakasai said on Thursday. “Vietnam is a major competitor for rice exports, but our neighbour now has no more rice for sale,” Mrs Porntiva said. The ministry would keep a close watch on the situation, particularly on the value of baht. The private sector had repeatedly expressed concern about its appreciation, she said. The private sector was worried that the baht might strengthens to 30 to the US dollar, a rise of seven to eight per cent. Businesses warned that such an appreciation would affect the country’s exports in the fourth quarter of the year, she said. The minister was confident that the Bank of Thailand was capable of keeping the baht value at a suitable level and that exports would grow by 20 per cent this year, as targeted. Dusit Nonthanakorn, chairman of the Thai Chamber of Commerce, said there is a possibility Vietnam would again devalue the dong the near future, although this would not have much impact on Thailand’s exports. “But the government must keep a close watch on the situation and try to stabilise the baht value at levels in line with the currencies of other Asian countries. By doing this, manufacturers’ trade competitiveness will not suffer,” Mr Dusit said.

Business worried about strong baht

The private sector was concerned about the strengthening of the baht's value as it could hurt trade negotiations and exports from the second quarter of the year onward, Commerce Minister Porntiva Nakasai said. “The private sector wants the government to closely oversee the baht’s movement to ensure that its will not be too much fluctuation or too strong. The strong baht will affect the country’s trade competitiveness,” Mrs Porntiva said on Thursday. The commerce minister believed the strong baht would be only short-lived as the Bank of Thailand is capable of curbing its value. Her ministry stood by its export expansion target for this year at 14 per cent. The chairman of the Rice Exporters Association, Chukiat Opaswong, predicted that if the value of baht stands at 33 baht per US dollar, rice exports in March will go down to 650,000 tones and 600,000 tonnes in April, from 700,000 tonnes a month in January and February. Mr Chukiat said the country has already lost its competitiveness in trading in white and jasmine rice because our prices are now about $200 to $300 a tonne more expensive than those of other Asean members. He said rice exporters will ask the Commerce and Finance ministries to find ways to curb the baht's value. “The baht is now the strongest currency in Asean, forcing Thailand’s trade partners to ask for a price review. There is a concern that the buyers will cancel their advance purchasing deals in the next one or two weeks,” he stated.