Nation Thailand
BOT sees low risk of Thai currency crisis as reserves remain high
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Thailand is unlikely to face a currency crisis similar to Indonesia’s current troubles, despite a record current-account deficit in April, a senior Bank of Thailand official has said.
Key facts
- His comments came after Thailand posted a current-account deficit of US$7.6 billion in April, the largest on record and almost twice the previous record of US$4.1 billion in April 2013.
- The figure turned Thailand’s cumulative current-account position from a surplus in the first three months of the year into a deficit of US$4.4 billion
- Don Nakornthab, assistant governor for the Monetary Policy Group at the Bank of Thailand, said the sharp deficit was driven mainly by energy imports and government efforts to build up fuel reserves, rather than by dangerous levels of
- The main reason, he said, was that US$7.4 billion of the April deficit came from net energy imports
- If that happens, Thailand’s full-year current-account balance should return close to equilibrium or show only a small deficit of no more than 1% of GDP, far from the levels seen before the 1997 crisis.
- Before the 1997 financial crisis, Thailand’s current-account deficit stood at about 8% of GDP.
Summary
Don Nakornthab, assistant governor for the Monetary Policy Group at the Bank of Thailand, said the sharp deficit was driven mainly by energy imports and government efforts to build up fuel reserves, rather than by dangerous levels of excessive consumption.
His comments came after Thailand posted a current-account deficit of US$7.6 billion in April, the largest on record and almost twice the previous record of US$4.1 billion in April 2013.